The Relationship between Short-Run Interest Rate and its Economic Determinants: Consumer Price Index, Industrial Production Index, Household Consumption and Exchange Rate. An Empirical Research for the Four Most Developed Countries

2017 ◽  
Vol 6 (2) ◽  
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Price Index ◽  
Consumer Price Index ◽  
Developed Countries ◽  
Household Consumption ◽  
Economic Determinants ◽  
Production Index ◽  
Short Run ◽  
The Relationship

Macroeconomic Determinants of Industrial Development in Nigeria

2016 ◽  
Vol 1 (1) ◽  
pp. 37
Author(s):  
John O. AIYEDOGBON ◽  
Sarah O. ANYANWU
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Industrial Development ◽  
Price Index ◽  
Manufacturing Sector ◽  
Consumer Price Index ◽  
Production Index ◽  
Industrial Productivity ◽  
Macroeconomic Determinants ◽  
The Impact

<p>The paper focuses on the impact of macroeconomic determinants on industrial productivity in Nigeria for the period, 1981-2013. It was discovered that while the Nigerian government had embarked on a number of industrial development strategies with the sole purpose of boasting industrial productivity in Nigeria, they seem to have yielded little or no result. The macroeconomic variables in the study include industrial production index, exchange rate, consumer price index, interest rate, broad money supply, foreign direct investment, credit to manufacturing sector and gross domestic product. The study employed OLS technique and found that exchange rate exert significant positive impact on industrial productivity in Nigeria.  Also, the impact of interest rate, FDI and real GDP on industrial production index is positive. On the other hand, consumer price index, broad money supply and credit to manufacturing sector exert negative impact on industrial development in Nigeria. The paper recommended that a workable M2 that can enhance credit to manufacturing sector and at the same time control interest rate to boast investment should be determined.</p>

scholarly journals Analisis Indeks Harga Konsumen di Indonesia Melalui Pendekatan Kointegrasi

2019 ◽  
Vol 4 (2) ◽  
pp. 110-118
Author(s):  
Muhamad Muin ◽  
Keyword(s):  
Exchange Rate ◽  
Empirical Study ◽  
Money Supply ◽  
Price Index ◽  
Consumer Price Index ◽  
Data Series ◽  
Short Term ◽  
Monthly Data ◽  
The Relationship

This study aims to analyze the relationship between the rupiah exchange rate (RER) and the money supply (M1) on the outgrowth of the consumer price index (CPI) in Indonesia. The data used in this study are monthly data series from January 2005 to January 2019. The results of this empirical study shows that there is a relationship between RER and M1 on CPI in the long term and there is a correction in the short term balance (ECM) which is influenced by M1. All of these variables are significant at α = 5% and partly significant at α = 1%.

ON SINGAPORE DOLLAR–U.S. DOLLAR AND PURCHASING POWER PARITY

2004 ◽  
Vol 49 (01) ◽  
pp. 71-84 ◽  
Author(s):  
VENUS KHIM-SEN LIEW ◽  
AHMAD ZUBAIDI BAHARUMSHAH ◽  
KIAN-PING LIM
Keyword(s):  
Exchange Rate ◽  
Price Index ◽  
Consumer Price Index ◽  
Smooth Transition ◽  
Adjustment Process ◽  
Economic Implications ◽  
Dollar Exchange Rate ◽  
Non Linear ◽  
Index Ratio ◽  
The Relationship

This study re-examines the validity of the relationship between the Singapore dollar–U.S. dollar exchange rate and relative prices using the latest econometric methodologies that account for non-linearity. Among others, this study finds Exponential Smooth Transition Autoregressive (ESTAR)-type non-linear mean-reverting adjustment process of the nominal Singapore dollar–U.S. dollar rate towards the consumer price index ratio. Unlike previous findings of a linear cointegration relationship between the nominal Singapore dollar–U.S. dollar exchange rate and consumer price index ratio, this study shows that the relationship is in fact non-linear in nature. The major economic implications of our findings are: (1) policy makers need to take non-linearity into consideration in their policy decisions; (2) the Monetary Authority of Singapore (MAS) is able to maintain the macroeconomic equilibrium despite the authority's strong dollar policy; and (3) one should keep track of Singapore's monetary policy and other innovations in aggregate demand in order to closely monitor the movement of the Singapore exchange rate.

scholarly journals THE IMPACT OF MONETARY POLICY ON THE ECONOMIC GROWTH OF KUWAIT FOR THE PERIOD OF 1980-2020

2021 ◽  
Vol 3 (9) ◽  
pp. 01-14
Author(s):  
Nor Asmat Ismail
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Price Index ◽  
Consumer Price Index ◽  
Policy Instruments ◽  
Real Gdp ◽  
The Government

The government of Kuwait has shifted its focus from the dependence on oil and has concentrated on applying a long-term strategic vision that seeks to recover the economy and raise the citizens’ standard of living. To accomplish these objectives, monetary policy should be formulated appropriately by the government. However, it seems that the effects of monetary policy instruments on the economic growth of Kuwait are not obvious. Therefore, the main purpose of this study is to empirically explore the effect of monetary policy on Kuwaiti economic growth. This research uses annual time series data on real GDP, exchange rate, broad money supply (M2), consumer price index, and deposit interest rate over the period (1980 - 2020) and applies Vector Error Correction Model (VECM). The results of the empirical analysis show the presence of a long-run relationship between real Gross Domestic Product and monetary policy instruments. Specifically, it finds that broad money supply (M2), deposit interest rate, and consumer price index affect economic growth positively and statistically significant. While the exchange rate affects real Gross Domestic Product negatively and statistically insignificant. The Granger causality test based on VECM shows two unidirectional causal relationships running from broad money supply and consumer price index to real GDP in the short run. Thus, the study suggests that policymakers concentrate on improving the economy by managing interest rates and maintain supporting environment for sustainable economic growth and development.

scholarly journals Analysis of Global Stock Exchange Index, Foreign Exchange Rate, Interest Rate and Inflation Rate Influences CSPI in Indonesia Stock Exchange (Period of January 2014 – 2015)

2019 ◽  
Vol 4 (6) ◽  
Author(s):  
Dahlia Br. Pinem
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Interest Rates ◽  
Stock Price ◽  
Price Index ◽  
Stock Exchange ◽  
Developed Countries ◽  
Stock Index ◽  
Stock Price Index ◽  
Global Stock

The economics of one country with other countries are interconnected because of the business relationship, especially since the developed countries greatly affect the economics of developing countries, so that the stock market in developed countries such as Dow Jones (DJIA) index, Footsie London Index (FTSE), Singapore Index (STI), Tokyo Nikkei Index (N225), Korea KOSPI Index (KS11), Hang Seng Hongkong Index (HSI) affect the Composite Stock Price Index (CSPI). The purpose of this study is to determine the influence of global stock indices on the Composite Stock Price Index (CSPI). In addition to the global macroeconomics index of Indonesia's Stock Index like the US Dollar against the rupiah, interest rates greatly affect the Composite Stock Price Index. The method of the sample research was conducted by judgment sampling. Hypothesis testing in this research is conducted by Multiple Regression. The results obtained simultaneously (F test) variables (FTSE, Dow Jones index, STI, KS 11, Hangseng, Nikkei 225, Dollar/USD exchange rate, interest rate, Inflation) have a significant effect on CSPI. Yet, only partially variable interest rate is not significant, while the other partially affects the CSPI.

scholarly journals ANALISIS PENGARUH NILAI TUKAR RUPIAH PER DOLLAR AS, TINGKAT SUKU BUNGA SBI, DAN INFLASI INDEKS HARGA KONSUMEN (IHK) TERHADAP IHSG DI BEI PERIODE 2003 – 2008

2017 ◽  
Vol 15 (3) ◽  
Author(s):  
Fransisca Kurnia ◽  
Linda Santioso
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Price ◽  
Price Index ◽  
Stock Exchange ◽  
Consumer Price Index ◽  
Financial Statement ◽  
Important Thing ◽  
Stock Price Index ◽  
A Company

Financial statement is an important thing for a company. The financial statement of the company can indicate the company's condition and the investors always wait it for setting their investments. The purpose of this survey is to observe whether Rupiah exchange rate per US Dollars, Interest rate of SBI and Inflation of Consumer Price Index (CPI) have influence Composite Stock Price Index at Jakarta Stock Exchange either through partial and also simultan. The result shows that variable of Interest rate of SBI and Inflation of Consumer Price Index (CPI) significantly influence on the Composite Stock Price Index. If it is analyzed simultaneously, three variables have significant influences on the Composite Stock Price Index.

scholarly journals Drivers of Inflation in the Economy of Bahrain

2016 ◽  
Vol 8 (3) ◽  
pp. 178
Author(s):  
Ibrahem H. Al-Ezzee
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Correction Term ◽  
Consumer Price Index ◽  
Government Expenditure ◽  
Cointegrating Vector ◽  
Long Run ◽  
Integration Test ◽  
Effective Exchange ◽  
Short Run

<p>The study tries to recognize the macroeconomic variables responsible for inflation in Bahrain during the period 1980-2010. For this purpose, co-integration test were used in the empirical analysis. Using Augmented Dickey-Fuller (ADF) Phillips Perron (PP) tests, the variables of the study revealed to be integrated of the order one 1(1) at first difference. Cointegration test was used to state the existence or otherwise of a cointegrating vector in the variables. Trace and Maximum Eigen test value point out co-integration at 5% level of significance pointing to the fact that the variables have a long-run relationship.</p><p>The paper found that inflation in the short-run is effected by M2, GEXP, and WACPI supporting the long run analysis. The signs of NEER and IR are not as expected. The error correction term is negative and significant at 1%, so the model is stable and supporting the Co-integration results.</p><p>The variance decompositions (VDs) approach is used to capture the relative importance of various shocks and their influences on our variable of inflation. The relative variance of inflation is due the exchange rate and interest rate. The results show that shocks to the CPI itself, Nominal Effective Exchange Rate NEER, Nominal Interest Rate NIR, M2, Government Expenditure GEXP, and<strong> </strong>Consumer Price Index of Main Partners WACPI over all horizons.</p>

scholarly journals Towards inflation targeting in Egypt: the relationship between exchange rate and inflation

2012 ◽  
Vol 15 (3) ◽  
pp. 325-332 ◽  
Author(s):  
Aliaa Khodeir
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Price Index ◽  
Consumer Price Index ◽  
Wholesale Price ◽  
Strong Relationship ◽  
Causality Test ◽  
Wholesale Price Index ◽  
Exchange Rate Movements ◽  
The Relationship

Since the Egyptian economy has recently moved towards inflation targeting, it became very important to know whether exchange rate movements have serious inflationary implications or not. To investigate this subject, the study aims to analyse the relevance of inflation with the exchange rate by using the Granger-causality test. Two indicators of inflation will be used, the consumer price index (CPI) and wholesale price index (WPI). In general, the results show a strong relationship between the two variables in a way that may give support to the application of ‘flexible inflation targeting regime instead of strict inflation targeting regime’.

scholarly journals INFLATION PERSISTENCE IN NORTH SUMATERA PROVINCE

2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Wily Julitawaty
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Error Correction ◽  
Price Index ◽  
Inflation Rate ◽  
Consumer Price Index ◽  
Secondary Data ◽  
Output Growth ◽  
Domestic Product

The purpose of this study was to determine the persistence of inflation in major North Sumatera Province in 2007 until 2012 and value contributed Output Growth  (GDP) of North Sumatera, Exchange Rate, Interest Rate and Error Correction Term about Inflation in North Sumatera. Data is used secondary data from general Consumer Price Index  (CPI) from North Sumatera Province include Medan, Pematangsiantar, Sibolga and Padangsidempuan monthly of January 2007 until December 2012. And secondary data Consumer Price Index  (CPI) of North Sumatera Province, Gross Domestic Product of  Province Sumatera Utara, Exchange Rate and Interest Rate of BI Rate yearly of 1999 until 2012. Model is used model econometric with Autoregressive method and Error Correction Model. Result of this research with estimation of  VAR model concludes that degree of persistence of 4 town from North Sumatera Province is low. Result of estimation of model ECM concludes that Interest Rate significantly affect to inflation rate, while Gross Domestic Product of  North Sumatera Province and Exchange Rate not significantly affect to inflation rate. While ECT becomes significant correction to variable inflation rate. Where the form of error correction in the ECM suggests a long-term relationship between the variables inflation, GDP variable, the variable exchange rate and variable interest rate is comparable.

scholarly journals The Relationship between the Exchange Rate, Interest Rate and Inflation: The Case of Turkey

2020 ◽  
Vol 67 (2) ◽  
pp. 259-275
Author(s):  
Ercan Özen ◽  
Letife Özdemir ◽  
Simon Grima
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Price Index ◽  
Consumer Price Index ◽  
Producer Price ◽  
United States Dollar ◽  
The Exchange Rate ◽  
The Interest Rate

The purpose of the study is to measure the effects of changes in exchange rates and interest rates on inflation and to determine which of the exchange rates or interest rates has a greater impact on inflation rate following the July 15, 2016 coup attempt in Turkey. Our expectation is that similar to most authors is to find that there is a long-term relationship between the inflation rates and both the exchange rate and interest rates and that the effect of the exchange rate on the Producer Price Index (PPI) is greater than that of the interest rates. Moreover, we expect to find a unidirectional causality relationship between the Interest Rate of Commercial Banks Credit (IRBC), Over Night Interest Rate (O/N) and United States Dollar (USD) and the PPI, but not between the IRBC, O/N, USD and the Consumer Price Index (CPI).

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