Effect Of Interest Rates Research Articles

The Potential Relationship Between the Fed's Rate Cut and the Global Economy

The recent decision by the Federal Reserve Board to cut interest rates has been hotly debated due to growing uncertainty about the US economy. The article provides an in-depth analysis of the potential risks facing the US economy and discusses the need for the rate cut. Based on this, the project will delve into the combined effects of the Federal Reserve's interest rate cut on the US economy, and discuss the positive role it will play in reducing inflation. Finally, the paper also argues that the Fed's interest rate cut is likely to trigger risks in global financial markets and will slow the recovery of the world economy. Considering the limited impact of the U.S. rate cut on the Chinese economy, it is still needed to continue to pay attention to possible asset price bubbles while remaining vigilant.

Dynamic web-based GIS tool for pre-feasibility evaluation of renewable energy projects

The high energy consumption and the large amount of emissions associated with roads life cycle makes it necessary for the administrations involved to invest in the implementation of renewable energy technologies on adjacent lands so that the net balance between CO2 emitted and CO2 saved is zero, thus helping to decarbonize the transport networks. To facilitate the first step in the long process leading up to the construction of wind and solar farms, a user-friendly tool is here presented that allows an early-stage evaluation of renewable energy projects. The ENROAD web-based GIS tool, through a functional, modern, intuitive, and ergonomic graphical user interface aimed at non-specialized users, optimizes the use of photovoltaic and wind technologies based on shading and wake losses, respectively, taking into account the solar radiation and wind conditions of the location and the geometry of the area selected by the user. In addition, the tool provides a thorough financial analysis, incorporating the effects of user-defined long-term interest rates, inflation rates, loan costs and efficiency losses on the Levelized Cost of Energy as well as traditional financial metrics, enabling users to conduct insightful if-then simulations. While this tool cannot have the precision of the in-depth study needed for the design of complex renewable energy facilities, it can facilitate the decision making by the administrations. Finally, a case study and a validation section have been included to demonstrate the technical and financial evaluation provided by ENROAD and ensure that the results provided are reasonable and accurate enough.

A post-Kaleckian econometric analysis of interest rates, income distribution, capacity utilization, accumulation and profit rates: the case of Italy

The aim of this paper is to analyze the effects of interest rates on rates of capacity utilization, capital accumulation and profit in Italy within a post-Kaleckian theoretical framework. The model employed in the analysis, which was developed by Hein/Schoder (2011), is based on monetary- authority-controlled real long-term interest rates that affect the functional distribution of income. Interest rates directly and indirectly affect the equilibrium rates of capacity utilization, accumulation and profit at a given debt–capital ratio. Our findings based on two econometric methods revealed that a higher real long-term interest rate has an adverse effect on these three endogenous variables in the Italian economy.

Economic Freedom, Budget Deficits, and Perceived Risk from Larger National Debt-to-GDP Ratios: An Exploratory Analysis of Their Real Interest Rate Effects

Economic Freedom, Budget Deficits, and Perceived Risk from Larger National Debt-to-GDP Ratios: An Exploratory Analysis of Their Real Interest Rate Effects

Determinants JCI of the Indonesian Stock Exchange (Comparison of IHSG Projection of OLS Method and ARIMA and GARCH Methods for the Period 2015-2023)

This study aims to examine the effect of interest rate, exchange rate, inflation, gross domestic product and LQ-45 index variables on the movement of the Composite Stock Price Index using the ordinary least square method. Comparison in predicting the movement of the stock price index through three models, and then compared with the projection results with OLS, ARIMA and GARCH methods. This research was conducted using monthly data on JCI, interest rates, exchange rates, inflation, gross domestic product and the LQ-45 index for the period May 2015 - December 2023. From the results it can be concluded that interest rates have a significant negative effect on JCI, exchange rates have a significant negative effect on JCI, inflation has a significant negative effect on the value of JCI, gross domestic product has a significant negative effect on JCI and the LQ-45 index has a positive effect on JCI. The results of the comparison of JCI projections with 3 models showed that the OLS model offers more accurate results and has the lowest MAPE value in predicting stock price movements.

The Effect of Inflation, Interest Rates and Non-Performing Loans On Stock Returns Through Profitability In Banking Companies Indonesia Period 2018-2022

Even if the Indonesian economy has grown and the stock market has improved after COVID-19, banking stock returns in Indonesia have remained stagnant. The returns on Indonesian banking stocks in 2022 were much lower than in prior years. Identifying the internal and external variables that contributed to the fall in these shares is an obvious challenge. The purpose of this study is to investigate how return on assets (ROA) acts as a mediator between inflation, interest rates, non-performing loans, and stock returns. Thirty businesses make up the sample for this study, which employs testing methodologies including multiple regression and route analysis. Additionally, in order to find the indirect impact, the Sobel test must be used. This study found that stock returns are positively affected by inflation and return on assets, but unaffected by interest rates and non-performing loans. Unlike inflation and interest rates, return on assets can moderate the impact of non-performing loans on stock returns. stock performance. Things that could affect future returns should be carefully considered by investors.

Optimal allocation for stock market-excluded retirees: Effects of interest rates, longevity risk, and upfront fees

This paper studies the decision-making dynamics of stock market-excluded retirees, focusing on the optimal allocation of retirement wealth among consumption, risk-free assets, and single premium immediate annuities. The analysis centers on two pivotal factors: insurer interest rates and longevity risk. The study introduces new dimensions by highlighting the modeled financial environment’s optimal investment–consumption-annuitization profiles under different market scenarios. Additionally, insights on the low demand for life annuities are offered, attributing a significant part to the impact of upfront fees. Employing a life-cycle consumption framework, the paper advocates adopting a commission-free model, enabling registered investment advisors to market annuities with periodic assets under management fees to revitalize annuity demand and bolster retirement security.

Effect of Market Volatility, Inflation, and Interest Rates on Stock Market Returns: An Empirical Analysis

Effect of Market Volatility, Inflation, and Interest Rates on Stock Market Returns: An Empirical Analysis

Interest rate dynamics and commodity prices

In economic studies and popular media, interest rates are routinely cited as a major factor behind commodity price fluctuations. At the same time, the transmission channels are far from transparent, leading to long-running debates on the sign and magnitude of interest rate effects. Purely empirical studies struggle to address these issues because of the complex interactions between interest rates, prices, supply changes, and aggregate demand. To move this debate to a solid footing, we extend the competitive storage model to include stochastically evolving interest rates. We establish general conditions for existence and uniqueness of solutions and provide a systematic theoretical and quantitative analysis of the interactions between interest rates and prices.

PENGARUH INFLASI DAN TINGKAT SUKU BUNGA TERHADAP PEMBIAYAAN PADA BANK SYARIAH DI KOTA BANJARMASIN

Purpose: This study aims to determine the effect of inflation and interest rates on financing at Islamic banks in Banjarmasin city. Design/methodology/approach: This research uses quantitative methods. The data used is secondary data and time series. Data sourced from the pages of Bank Indonesia, the Financial Services Authority (OJK), the Central Statistics Agency (BPS) and data from Islamic Commercial Banks which are the objects of this study in the period 2014 to 2023. Findings: Based on the results of statistical data processing, the results of this study indicate that the value of Sig. Inflation variable (X1), amounting to 0.993> 0.05 and the tcount value of 0.009 < 2.571. Sig value. Interest Rate Variable (X2) is 0.066> 0.05 and the tcount value is -2.571 < 2.571. The results of this study indicate that simultaneously the inflation and interest rate variables affect financing at Islamic banks in Banjarmasin City. This can be proven by the value of Fcount 2.825 > Ftable 4.45. Research implications: Based on the research results, it is known that although inflation and interest rates have no effect on financing in Islamic banks, the government must remain effective in controlling macroeconomic activities to maintain the stability of inflation and interest rates, so that economic stability can be guaranteed.

Measuring Effects of Interest Rate Fluctuations on Retail Loan Holder in Metropolitan City: Evidence from Nepal

Background: Interest rate fluctuations have long been a critical research topic, particularly in relation to retail loan holders. In Nepal, the status of retail loans has been progressively improving, making it essential to understand how interest rate changes affect retail loan borrowers in Kathmandu Valley. Objective: This study aims to investigate the impact of interest rate fluctuations on retail loan holders in Kathmandu Valley. It seeks to determine how these fluctuations influence banking performance and retail loan products in the context of Nepalese financial institutions. Method: A descriptive research design was employed, focusing on retail loan holders from Nepalese financial institutions in Kathmandu Valley. A sample of 383 retail loan borrowers was selected using simple random sampling. Data were collected via a structured questionnaire. The analysis involved descriptive statistics, correlation, regression, as well as pre-estimation and post-estimation techniques. Result: The findings indicate that interest rate fluctuations have a positive and significant impact on retail loan products offered by Nepalese banking institutions. Higher interest rates tend to enhance retail loan offerings, contributing to improved banking performance and increased creativity in loan practices. Conclusion: The study underscores the positive role of interest rate fluctuations in shaping retail loan products and banking performance in Nepal. It suggests that financial institutions could benefit from adjusting their interest rates to foster better loan practices and improve overall performance. For economic benefit, banks should consider lowering interest rates and providing attractive returns to depositors to balance their profitability and enhance financial stability. This research provides a foundation for further academic exploration into the effects of interest rates on retail loan behavior. Paper Types: Research Paper Keywords: Interest rate, Retail banking products, Ordered logistic model, Kathmandu valley. JEL Classification: G1, E43, G21 and G41

The Dynamic Relationship Between Exchange Rate Volatility and Stock Prices in the Egyptian Real Estate Market and the Moderating Effect of Interest Rates

Among different channels of the financial market, the exchange rates and stock markets play a vital role in the domestic and international markets. This study aims to explore the dynamic relationship between the exchange rate (USD/EGP) and the real estate sector listed companies of the Egyptian Stock Exchange (EGX) from 2013 to 2023. Additionally, the study examines the moderating effect of interest rates on the relationship. To achieve this, the study employs several econometric methods such as Augmented Dicky Fuller (ADF) test, Granger Causality test to determine the direction of the relationship, Vector Autoregressive (VAR) model, and more. The results demonstrate that a long-run relationship exists between the variables. Furthermore, there is a significant unidirectional causality that runs from the exchange rate to real estate stock prices; thus, fluctuations in the exchange rate can significantly affect the profitability of investments in real estate stocks. Therefore, investors should closely monitor the movements in the exchange rate level to predict changes in real estate stock prices. When including the interest rate as a moderator, the outcome changes to bidirectional causality, meaning that the exchange rate and real estate stock price movements affect each other at a 1% significance level. Hence, interest rate could be used as an instrument to control demand in both the stock market and foreign exchange market. Finally, it is recommended that policymakers use the monetary policy while considering this bidirectional relationship in the presence of interest rate as a moderating variable.

The Effect of Exchange Rate, Interest Rate, and Inflation on Jakarta Composite Index (IHSG) during COVID-19 Pandemic in Indonesia

This study aims to test and analyze the effect of macroeconomic factors on the Jakarta Composite Index during the Pandemic of COVID-19 in Indonesia. The macroeconomic factors used in this study as independent variables are Exchange Rate, Interest Rate, and Inflation. While Indeks Harga Saham Gabungan (IHSG) or Jakarta Composite Index is used as the dependent variable. This study uses daily data during the pandemic period in Indonesia, from April 2020 to June 2023. The secondary data are obtained from several official websites, such as www.investing.com and www.bi.go.id. The analysis technique used is descriptive analysis and hypothesis testing with STATA tools. The results obtained show that all independent variables have a significant effect on the dependent variable. Exchange rate and interest rate have a negative significant impact on IHSG. Conversely, the inflation effect is positively significant to IHSG. This research adds to our understanding of the financial dynamics in difficult times and provides insightful information for investors, analysts, and policymakers attempting to manage the intricacies of the stock market in the context of COVID-19.

Pengaruh Profitabilitas, Nilai Tukar dan Tingkat Suku Bunga terhadap Harga Saham Perusahaan Sub Sektor Batubara

The coal sector is the main producer in Indonesia, which is the largest exporter in Asia and Europe. The coal sub-sector has high prospects because most of the energy sources for power plants use coal as an energy source. Indonesia has abundant potential resources, especially mining which plays an important role in driving the country's economy. This creates jobs, guarantees the country's energy security and increases the country's foreign exchange earnings. This research was conducted to examine the effect of Profitability, Exchange Rates and Interest Rates in the coal sub-sector companies on the IDX. There are 20 populations of coal mining companies listed on the IDX. The sample of this research is 8 companies' financial reports obtained by using purposive sampling method. The analytical method used is panel data regression analysis . The results showed that Return on Equity has a positive effect on stock prices, while the exchange rate and interest rates have no effect on stock prices. Simultaneously Return On Equity, Exchange Rates and Interest Rates have a joint effect on Stock Prices.

Modelling Bank Lending in Cameroon Using Two Steps Cointegration Technique

This paper has as objective to model the key determinants of bank lending in Cameroon using time series data collected mainly from the World Bank database for the period spanning from 1979 to 2019. After exploring related theoretical and empirical literature, Engle and Granger two steps cointegration testing procedure was employed together with the necessary pretesting (unit root tests) and post estimation testing. Results of stationarity tests indicate that variable were a mixture of stationary and first difference. The lagged residual term possess unit root at level indicating that the variables are actually cointegarted and that ECM is relevant. The estimated cointegration regression model and the corresponding ECM were globally significant at one percent and the models were equally adequate with explanatory power of over 73 and 52 percent respectively. The results of the two models revealed that the effect of economic growth on bank lending was positive and highly significant, the effect of interest rate is negative and equally significant, then the effect of Gross Investment rate was also positive but not very significant in the short run. Based on the major findings, bank lending can be encouraged by stimulating the level of economic activities, by reducing interest rate on loans and by encouraging more investment projects.

The Influence of Inflation, Interest Rates, and Financial Performance on LQ45 Index Share Prices in 2019-2023

This research aims to understand and analyze the effect of inflation on stock prices, the effect of interest rates on stock prices, and the effect of financial performance on stock prices. This study uses a quantitative method. The population in this study consists of companies listed on the Indonesia Stock Exchange and included in the LQ45 index for the years 2019-2023. The sample selection technique used is purposive sampling. Based on predetermined criteria, 21 companies were selected as samples in this study. The data used are secondary data, including inflation data, interest rates, company financial reports, and stock prices. The data collection techniques include non-participatory observation with documentation study and literature review. The data analysis techniques used are descriptive tests, classical assumption tests, panel data regression analyses, and hypothesis testing, with the analytical tool used being EVIEWS 12. The results of the study show that simultaneously, the variables of Inflation, Interest Rates, and Financial Performance have a significant effect on stock prices. Partially, the inflation variable does not affect stock prices, while the interest rate variable has a significant negative effect on stock prices, and financial performance has a significant positive effect on stock prices.

THE EFFECT OF INFLATION, INTEREST RATE AND COVID-19 PANDEMIC ON RUPIAH EXCHANGE RATE 2009-2023

This study aims to determine the effect of inflation, interest rates, and Covid-19 pandemic on rupiah exchange rate during the period from 2009 to 2023. This research utilizes secondary data obtained from Bank Indonesia and employs multiple linear regression analysis method with the assistance of SPSS software version 29.0. The research findings indicate that inflation has a positive and significant effect on the exchange rate of the rupiah, while interest rates have a negative and significant effect on the exchange rate of the rupiah. Additionally, the Covid-19 pandemic (as a dummy variable) has a positive and significant effect on the exchange rate of the rupiah. The Coefficient of Determination (R2) is 0.566, meaning that 56.6% of the variability in the exchange rate of the rupiah can be explained by inflation, interest rates, and the Covid-19 pandemic. Furthermore, the variable most dominant in influencing the exchange rate of the rupiah is inflation, accounting for 39.9%

The Effect of Interest Rates and Financial Performance on Stock Prices with Inflation as a Moderating Variable (Stocks Listed on the Jakarta Islamic Index Period 2014-2023)

The Effect of Interest Rates and Financial Performance on Stock Prices with Inflation as a Moderating Variable (Stocks Listed on the Jakarta Islamic Index Period 2014-2023)

Effect of Macroeconomic Variables on Economic Growth in Nigeria

The study examined the effect of macro-economic variables on economic growth in Nigeria between 1990-2022. Specifically, the paper examined the effect of Exchange rate on Economic growth in Nigeria and determined the effect of interest rate on Economic growth in Nigeria. The paper employed ex-facto research design, using secondary data and adopted SVAR model. The paper found out that interest rate has a significant effect on Economic growth (RGDP) in Nigeria, and found that exchange rate has a significant effect on Economic growth (RGDP) in Nigeria. The study concluded that macroeconomic variables has a significant effect on Economic growth in Nigeria. Based on the study’s findings and conclusions above, the following recommendations were made: the government should improve on her foreign reserves as an absolute measure that will stabilize exchange rate to boost economic environment for effective investment to thrive and contribute to gross domestic product in Nigeria, and interest rate is found to have increased the potentials of Economic growth in Nigeria. It is therefore important to note that since interest rate have significantly affected the Economic growth in Nigeria, the CBN should improve on discount rate to stabilize interest rate to boost economic environment for effective investment to thrive and contribute to gross domestic product in Nigeria.

Interest effect of international outsourcing, foreign investment, and welfare

AbstractThis paper investigates the welfare ramifications of international outsourcing in the presence of foreign investment initiated by outsourcing‐induced interest effect. Utilizing the Heckscher‐Ohlin model of general equilibrium, we show that unlike the common view that outsourcing renders negative effects on domestic employment, but positive effect on the welfare, (a) the output and employment effects of outsourcing are ultra‐biased such that it always increases (decreases) those of the outsourcing (nonoutsourcing) sector; (b) the effects of outsourcing on factor‐intensities and factor‐prices depend on the factor intensity ranking such that outsourcing occurring in the capital‐intensive (labor‐intensive) sector lowers (raises) the capital‐labor ratio of both the outsourcing and the nonoutsourcing sectors, lowers (raises) the real wage rate and raises (lowers) the real interest rate, and hence worsens (improves) income distribution; (c) in the presence of foreign investment, outsourcing in the capital‐intensive (labor‐intensive) sector may be welfare‐reducing (is always welfare‐increasing) due to increase (decrease) in the outsourcing‐induced interest payments for the foreign capital stock. Noting that international outsourcing nowadays serves as a key driving force for production fragmentation and supply chain formation, this paper discovers an important, but previously unnoticed feature in international outsourcing, namely, the outsourcing‐induced an interest rate effect on foreign capital movement.