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The sensitivity of households to interest rate - analysis of the relationship of interest rates and the amount of loans and deposits in the Czech Republic

Author

Listed:
  • Jiri Rotschedl

    (University of Economics, Prague)

Abstract

This paper deals with the relationship of short-term and long-term interest rates and the amount of deposits and loans of households. The aim is to demonstrate the relationship between interest and Current Discount Index (CDI). CDI expresses the growth rate of the ratio of loans to deposits of households. Author?s assumption is: increasing interest rates will reduce loans and increase savings. In the paper are savings considered to be identical with deposits in bank accounts. The results of the analysis show that households do not respond to changes in interest rates relative to the amount of loans and the amount of savings.

Suggested Citation

  • Jiri Rotschedl, 2014. "The sensitivity of households to interest rate - analysis of the relationship of interest rates and the amount of loans and deposits in the Czech Republic," Proceedings of International Academic Conferences 0702647, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0702647
    as

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    File URL: https://iises.net/proceedings/12th-international-academic-conference-prague/table-of-content/detail?cid=7&iid=117&rid=2647
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    More about this item

    Keywords

    Interest Rate; Loans; Savings; Households; Current Discount Index;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E29 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Other
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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