Interest Rate
Hasan Heidari; Jafar Haghighat; Zahra Karimi Takanlo; reza ranjpour
Abstract
In the Iranian economy over the past few decades, the financial system has been subject to many restrictions, including the grading of bank interest rates. In this study, considering the economic conditions of Iran, the interest rate of bank deposit is determined by combining the two approaches of liberalization ...
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In the Iranian economy over the past few decades, the financial system has been subject to many restrictions, including the grading of bank interest rates. In this study, considering the economic conditions of Iran, the interest rate of bank deposit is determined by combining the two approaches of liberalization and financial development and financial constraint. In this way, contrary to the bank's interest rate order, the central bank has issued two interest rates as a ceiling and a bank interest rate to banks, which are upper and lower limits. Banks can then operate freely and competitively, depending on their performance, between profit and loss ceilings, and determine the appropriate rate of interest for the banks themselves and adjust the business cycle more quickly and maintain their finances. To do this, a smooth panel regression model (PSTR) with data from the central bank and commercial banks of the country in the interval (2006-2016) has been estimated high and low.bank deposit interest rates.
Hsiao's Causality
Mohammad Taher Ahmadi; Mohammad Ali Fallahi; Somayeh Khosravi
Volume 1, Issue 3 , January 2012, , Pages 234-203
Abstract
Interest as investment opportunity cost or cost of required credits in production process plays an important role in cost of goods manufactured. So it is expected that inflation rate might be affected by changes in interest rate. The present paper studies causality relation between changes in interest ...
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Interest as investment opportunity cost or cost of required credits in production process plays an important role in cost of goods manufactured. So it is expected that inflation rate might be affected by changes in interest rate. The present paper studies causality relation between changes in interest rate and inflation rate in countries of Mena. Quarterly data concerning interest and inflation rates were analyzed in 16 member countries in Mena in the period 1997-2008. Augmented Dicki-Foler and Philips structural failure tests were used to assess the reliability of time series data .To determine causality relation between two variables of interest and inflation, Granger and Hsiao's causality tests were utilized. The results obtained from Hsiao's and Granger causality tests indicate that the research hypothesis is supported only for Qatar and Djibouti. In other words, in both countries there is a causality relation from changes in interest rate to changes in inflation rate but there isn't such relation in other countries. Considering the results of research, it can be said that policy of reduced interest rate can't lead us toward the intended goal of controlling inflation rate
