Interest Rates and Household Saving Behaviour: An Empirical Puzzle and a Solution Using Czech Data

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F20%3A10246230" target="_blank" >RIV/61989100:27510/20:10246230 - isvavai.cz</a>
Result on the web
<a href="https://pep.vse.cz/artkey/pep-202005-0003_interest-rates-and-household-saving-behaviour-an-empirical-puzzle-and-a-solution-using-czech-data.php" target="_blank" >https://pep.vse.cz/artkey/pep-202005-0003_interest-rates-and-household-saving-behaviour-an-empirical-puzzle-and-a-solution-using-czech-data.php</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.18267/j.pep.741" target="_blank" >10.18267/j.pep.741</a>

Result language
angličtina
Original language name
Interest Rates and Household Saving Behaviour: An Empirical Puzzle and a Solution Using Czech Data
Original language description
This paper investigates the transmission from interest rates to household saving behaviour when introducing two main innovations of analysing this relationship. The first one is based on the use of a set of client interest rates instead of one monetary policy rate. This step enables us to distinguish impacts of the substitution and income effects in more detail. The second major innovation lies in the division of households into income categories, which provides us with more observations and thus makes it possible to conduct this analysis even for a single country. Using the generalized method of moments for the dynamic panel data, we analyse Czech household behaviour for the period 2004-2015. The results highlight that when we ignore details of the transmission channel and use only a monetary policy rate, we lose crucial information about contradictory impacts of the substitution and income effects that are primarily reflected in the client interest rates. This fact may clarify most of the interest rate-savings rate puzzle.
Czech name
—
Czech description
—

Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50202 - Applied Economics, Econometrics

Project
<a href="/en/project/GA19-19485S" target="_blank" >GA19-19485S: Spatial Dynamics and Inequality: The Role of Connectivity and Access to Finance</a><br>
Continuities
S - Specificky vyzkum na vysokych skolach

Publication year
2020
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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