scholarly journals Uncovering the Relationship between Real Interest Rates and Economic Growth

2013 ◽  
Author(s):  
Bruce E. Hansen ◽  
Ananth Seshadri
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Real Interest Rates ◽  
The Relationship

Zur gesamtwirtschaftlichen Problematik des Zusammenwirkens von Nominalzinsbesteuerung und Inflation

1996 ◽  
Vol 45 (2) ◽  
Author(s):  
Stefan Glaß
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Tax Evasion ◽  
Real Interest Rates ◽  
Legal Rules ◽  
The Government

AbstractIn Germany, nominal interest earnings are taxed. Combined with persistent inflation, this leads to real interest rates which are often extremely low and sometimes even negative. This, in turn, creates strong incentives for tax evasion. When the government attempts to alter the legal rules of the taxation of interest in order to reduce the amount of tax evasion, many citizens strive to prevent their interest earnings from being taxed by transferring large sums of capital to other countries. Moreover, the excessive actual taxation of real interest earnings causes a misallocation of saving, which hampers economic growth.

scholarly journals Hubungan Financial Deepening dan Pertumbuhan Ekonomi: Studi Empiris di Indonesia

2018 ◽  
Vol 12 (1) ◽  
pp. 45
Author(s):  
Jihad Lukis Panjawa ◽  
Ira Fitriani Widianingrum
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Exchange Rate ◽  
Financial Markets ◽  
Interest Rates ◽  
Financial Sector ◽  
Financial Deepening ◽  
Rate Of Development ◽  
The Exchange Rate ◽  
The Relationship

<p>Financial deepening has been identified as one of the strategies which can accelerate the rate of development. Deepening the financial sector is one important step in the effort to develop the country's financial markets especially developing countries one of which Indonesia. In this research will identify is the relationship between finacial deepening, the exchange rate of rupiah, interest rates and economic growth in Indonesia year of 1985-2015. The approach used in this study is the causality granger. The results in this study was the performance of the financial sector is still shallow. Financial deepening and economic growth have a one-way relationship, namely economic growth affects the financial deepening. Evidence that the introduction of Demand-Following Hypothesis in Indonesia. The exchange rate of the rupiah and financial deepening do not influence each other, as well as economic growth and the exchange rate of the rupiah not influence each other.</p><strong></strong><em></em><strong><em></em></strong>

Further Mexico rate reductions look likely

2019 ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Activity ◽  
Real Interest Rates ◽  
Content Type ◽  
Marginal Impact ◽  
Economic Slowdown

Significance The move follows reports from the National Institute of Statistics on August 23 that GDP had grown by just 0.02% quarter-on-quarter in the second quarter (Q2) of 2019. With Q1 having shown a negative figure, Mexico narrowly avoided recession. The results confirm a sharp economic slowdown since the second half of 2018. On August 15, Banxico lowered its target interest rate by 25 basis points to 8.0%. Impacts The monetary loosening should reduce the temptation of some legislators to alter Banxico’s mandate in the pursuit of economic growth. Given the sharp economic slowdown, the monetary loosening will probably have only a marginal impact on credit. With inflation falling, real interest rates are increasing, and should continue to act as a brake on economic activity.

scholarly journals Oil price and Indonesian economic growth

2019 ◽  
Vol 17 (1) ◽  
pp. 152-162
Author(s):  
Sultan ◽  
Julius Jhonny Sarungu ◽  
Albertus Maqnus Soesilo ◽  
Siti Aisyah Tri Rahayu
Keyword(s):  
Economic Growth ◽  
Exchange Rates ◽  
Interest Rates ◽  
Empirical Evidence ◽  
Least Squares Method ◽  
Oil Prices ◽  
Negative Influence ◽  
Balance Of Payments ◽  
The Relationship ◽  
Positive Effect

Oil prices and economic growth are important indicators to see the success of Indonesia’s development performance. The use of oil as the world’s main energy source in general and Indonesia in particular is driven by industrialization. The more industries, the greater the energy resources needed. In the same context, economic growth will also increase oil demand. The purpose of this study is to examine and create empirical evidence of the relationship between world oil prices and economic growth towards domestic oil prices. Furthermore, to test and create empirical evidence on the relationship of domestic oil prices, agriculture, trade, investment, inflation, interest rates, industry, labor, exchange rates and balance of payments to economic growth. The expected output of this research will be to provide information on the policy of the transmission mechanism of oil prices and economic growth in Indonesia. The method used is descriptive and econometric approach to the analysis of simultaneous equation models with two stages of the least squares method. The results of the study indicate that there is a simultaneous relationship between oil prices and economic growth. Economic growth, world oil prices and domestic oil prices a year ago had a positive effect on domestic oil prices. The second result shows that domestic oil, agriculture, investment, interest rates, industry, exchange rates, balance of payments and economic growth in the previous year have a positive effect on economic growth, while trade, inflation and labor have a negative influence on economic growth.

scholarly journals Financial Development, Financial Repression, And Growth In Developing Economies

2011 ◽  
Vol 11 (1) ◽  
pp. 115
Author(s):  
Lillian Kamal
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Financial Development ◽  
Financial Liberalization ◽  
Developing Economies ◽  
Banking System ◽  
Financial Repression ◽  
Overwhelming Evidence ◽  
Geographical Regions ◽  
The Relationship

Many studies have examined the relationship between economic growth and finance. A continuing question is the choice of a clear proxy for financial development. This paper attempts to elucidate this issue from a developing country perspective, while controlling for financial repression. The proxy of choice is the ratio of currency outside the banking system to real output (CB). This proxy is unique in that it is related to the degree of financial repression, and thus relates differently to economic growth depending on the level of financial development. The statistics support the hypothesis of a U-shaped behavior of CB with financial liberalization. The empirical results show that CB relates negatively to growth in countries that are less financially liberalized and positively with growth in countries that are more financially liberalized. The literature has used real interest rates as a measure of financial repression. An innovative measure of financial repression is then proposed that combines the use of currency inside banks and currency outside banks, and is tested concurrently with a broad money depth measure. The study is carried out using a panel approach, and the sample is also divided into different geographical regions, in order to see whether the relationship differs between geographical regions. The study concludes that there is overwhelming evidence that financial repression, which is indicative of financial under-development, is negatively related to growth.

scholarly journals INTEREST RATE REFORMS AND ECONOMIC GROWTH IN SADC COUNTRIES: THE SAVINGS AND INVESTMENT CHANNEL

2019 ◽  
Vol 66 (4) ◽  
pp. 507-523
Author(s):  
Clement Moyo ◽  
Pierre Le Roux
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Real Interest Rates ◽  
Financial Reforms ◽  
Pooled Mean Group ◽  
Low Levels ◽  
The Impact

The 2008/2009 global financial crisis has re-ignited the debate around financial reforms with contrasting views with regards to the impact of financial reforms on economic growth. This study examines the impact of interest rate reforms on economic growth through savings and investments in SADC countries for the period 1990-2015. Three specifications are used for the analysis; the first one determines the influence of interest rate reforms on savings, the second one analyses the effect of savings on investments while the third one examines whether investments have a positive impact on economic growth. The Pooled Mean Group (PMG) estimation technique is employed for analysis. The results show that interest rate reforms have a positive impact on economic growth through savings and investments. The study therefore recommends that market forces should be allowed to determine real interest rates and furthermore, real interest rates maintained at artificially low levels may harm economic growth.

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