Search: Nominal interest rate

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RBA Glossary definition for Nominal interest rate

Nominal interest rate – The nominal interest rate refers to the cost of borrowing money before adjustment for inflation i.e. it includes compensation for the expected erosion of the value of the borrowed funds due to inflation. It is the cost visible to the borrower, and is composed of the real interest rate plus inflation.

RBA Glossary definition for interest rate

interest rate – The term used to describe the cost of borrowing money or the return to the owner of the funds which are invested or lent out. It is usually expressed as a percent per annum of the amount of money borrowed, lent or invested.

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Simulation Results

1 Nov 1989 RDP 8907
Mark Britten-Jones and Warwick J. McKibbin
The interesting comparison between this shock and the real interest rate shock is that both lead to a rise in nominal interest rates. ... The important distinction is whether the change in nominal interest rates reflects expected inflation, or a rise in
https://www.rba.gov.au/publications/rdp/1989/8907/simulation-results.html

Conclusion

1 Nov 1989 RDP 8907
Mark Britten-Jones and Warwick J. McKibbin
Several interesting results emerge from this study. One result which is worth highlighting is the different relationship between a rise in nominal interest rates and housing investment. ... We showed that a rise in interest rates that reflected a change
https://www.rba.gov.au/publications/rdp/1989/8907/conclusion.html

Model Structure

1 Nov 1989 RDP 8907
Mark Britten-Jones and Warwick J. McKibbin
We can think of the nominal interest rate as being composed of two parts, an inflation premium π and a real component r. ... The information contained in q. should be noted; it contains information on taxes, rents and future rents as well as interest
https://www.rba.gov.au/publications/rdp/1989/8907/model-structure.html

Tax Policy and Housing Investment in Australia

1 Nov 1989 RDP 8907
Mark Britten-Jones and Warwick J. McKibbin
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1989/8907.html

Introduction

1 Nov 1989 RDP 8907
Mark Britten-Jones and Warwick J. McKibbin
Under this framework, taxes and interest rates affect the profitability and market value of capital in the housing sector. ... In particular the model incorporates a real capital gains tax as well as depreciation allowances and the tax deductibility of
https://www.rba.gov.au/publications/rdp/1989/8907/introduction.html