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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.

Search Results

Housing Prices, Mortgage Interest Rates and the Rising Share of Capital Income in the United States

9 Jun 2016 RDP 2016-04
Gianni La Cava
In effect, I argue that the fall in nominal interest rates over the 1980s and 1990s raised the demand for housing and pushed up housing prices and rents (relative to ... I estimate that the long-term decline in interest rates can explain more than half
https://www.rba.gov.au/publications/rdp/2016/2016-04.html

Statistical Evidence

14 Jun 2016 RDP 2016-04
Gianni La Cava
The key explanatory variable is the average level of nominal interest rates on new mortgage debt (INTRATE). ... This allows for an examination of the channels through which changes in nominal interest rates might have affected the housing capital income
https://www.rba.gov.au/publications/rdp/2016/2016-04/statistical-evidence.html

Housing Prices, Mortgage Interest Rates and the Rising Share of Capital Income in the United States

1 May 2016 RDP 2016-04
Gianni La Cava
The key explanatory variable is the average level of nominal interest rates on new mortgage debt (INTRATE). ... This allows for an examination of the channels through which changes in nominal interest rates might have affected the housing capital income
https://www.rba.gov.au/publications/rdp/2016/2016-04/full.html

Introduction

14 Jun 2016 RDP 2016-04
Gianni La Cava
The subsequent decline in nominal interest rates lowered the cost of owning and so effectively increased the demand for housing for credit-constrained households (Ellis 2005). ... H1: Lower nominal interest rates are associated with higher net housing
https://www.rba.gov.au/publications/rdp/2016/2016-04/introduction.html

References

14 Jun 2016 RDP 2016-04
Gianni La Cava
RDP 2016-04: Housing Prices, Mortgage Interest Rates and the Rising Share of Capital Income in the United States References. ... Genesove D (2003), ‘The Nominal Rigidity of Apartment Rents’,. The Review of Economics and Statistics. ,
https://www.rba.gov.au/publications/rdp/2016/2016-04/references.html

Data

14 Jun 2016 RDP 2016-04
Gianni La Cava
The state-level estimates of mortgage interest rates are obtained from the FHFA. ... 17.9. 17.8. Nominal mortgage interest rate (%). 1,784. 8.2. 7.7. 2.7.
https://www.rba.gov.au/publications/rdp/2016/2016-04/data.html

Stylised Facts

14 Jun 2016 RDP 2016-04
Gianni La Cava
RDP 2016-04: Housing Prices, Mortgage Interest Rates and the Rising Share of Capital Income in the United States 4. ... The larger rise in net housing profit is due to the decline in interest rates over this period.
https://www.rba.gov.au/publications/rdp/2016/2016-04/stylised-facts.html

Conclusion

14 Jun 2016 RDP 2016-04
Gianni La Cava
RDP 2016-04: Housing Prices, Mortgage Interest Rates and the Rising Share of Capital Income in the United States 6. ... Download the Paper 1.13. MB. I provide evidence that the secular increase in housing's share of the US economy reflects a combination
https://www.rba.gov.au/publications/rdp/2016/2016-04/conclusion.html