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RBA Glossary definition for Real interest rate

Real interest rate – The real interest rate refers to the cost of borrowing money (i.e. the nominal interest rate) net of inflation. It takes account of the fact that part of the nominal interest that borrowers pay to lenders represents compensation for anticipated inflation. The remaining �real� component better reflects the economic cost of borrowing and the return to lending.

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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Annex: Real Interest Parity

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
where E(R. mt. ) and. are the ex ante or expected domestic and foreign real interest rates. ... The major practical problem here is that ex ante real interest rates are not directly observable.
https://www.rba.gov.au/publications/rdp/1992/9203/annex-real-interest-parity.html

Data Appendix

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Real long-term interest rates refer to long-term rates minus a centred 3-year moving average of inflation. ... Short-term real interest rates are the three month nominal rate for period t to t1 less the realised inflation rate over this period.
https://www.rba.gov.au/publications/rdp/1992/9203/data-appendix.html

The Changing Degree of International Financial Market Integration

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
If the exchange rate is expected to move to eliminate discrepancies between expected national inflation rates over the relevant asset holding period, then real interest rates may be the relevant relative ... of fully linked rates across countries, in
https://www.rba.gov.au/publications/rdp/1992/9203/changing-degree-of-international-financial-market-integration.html

Tables

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Table 4: Real Interest Rate Linkages With the United States: Three-Month Interest Rates and Consumer Prices. ... Table 5: Real Interest Rate Linkages With Germany: Three-Month Interest Rates and Consumer Prices.
https://www.rba.gov.au/publications/rdp/1992/9203/tables.html

Introduction

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Similarly, tests to find long-run relationships between the real exchange rate and variables such as real interest differentials have failed (Meese and Rogoff (1988), Coughlin and Koedijk (1990)). ... financial markets does not imply the integration of
https://www.rba.gov.au/publications/rdp/1992/9203/introduction.html

Bibliography

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
21, (April), pp. 333–355. Cumby, R.E. and F.S. Mishkin (1986), “The International Linkage of Real Interest Rates: The European-U.S. ... 4, (Winter), pp. 117–134. Mishkin, F. (1984), “Are Real Interest Rates Equal Across Countries?
https://www.rba.gov.au/publications/rdp/1992/9203/bibliography.html

Real Exchange Rates and the Globalisation of Financial Markets

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Research Discussion Paper – RDP 9203 Real Exchange Rates and the Globalisation of Financial Markets.
https://www.rba.gov.au/publications/rdp/1992/9203/

Real Exchange Rates and the Globalisation of Financial Markets

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Research Discussion Papers contain the results of economic research within the Reserve Bank
https://www.rba.gov.au/publications/rdp/1992/9203.html

Charts

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Download the Paper 670. KB. Chart 1. Unexplained Real Exchange Rate Movements About Equilibrium: the Cointegrating Residuals. ... Chart 2. 3-Month Interest Rates Differentials – on-shore deposits minus off-shore deposits.
https://www.rba.gov.au/publications/rdp/1992/9203/charts.html

Concluding Remarks

1 Mar 1992 RDP 9203
Adrian Blundell-Wignall and Frank Browne
Three of the four real exchange rates considered, and all of the real interest differentials and cumulated current account balance differences possess a unit root. ... Increasing globalisation of financial markets combined with lack of goods market
https://www.rba.gov.au/publications/rdp/1992/9203/concluding-remarks.html