Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Styrräntans effekter på hushållens aggregerade konsumtionsutgifter
Linköping University, Department of Management and Engineering, Economics.
2019 (Swedish)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesisAlternative title
The Effect of the Policy Rate on Households’ Aggregate Consumption Expenditure (English)
Abstract [en]

Through the transmission mechanism, key interest rates will have a tangible impact on the economy, encompassed by the aggregate consumption expenditure of households. The purpose of the study is to investigate more closely the mechanisms by which the policy rate will affect households aggregate consumption and the consequences that the policy rate will have on household consumption expenditure. In order to carry out the study, an inductive method is used where the results from previous research in the area concerned have since been compared with the theoretical framework.  

The policy rates will, via the various channels of the transmission mechanism, affect the household´s propensity for consumption. An example is the policy rate outcome on market interest rates (via the interest rate channel), which will make an impact on households disposable income through the cashflow channel. Another example is how interest rates through the interest rate channel have an impact on households net worth, a factor that plays a significant role in how households choose to plan their consumption expenditures.

Changes in the policy rate will also influence the inflation expectations of households, the exchange rate and the credit channel. Other indirect effects of policy rate changes include the emergence of income- and substitution effects in consumption, its influence on how the existing human capital is priced and the emergence of redistribution effects among lenders and borrowers.

The characteristics of households, such as life situation, age segment, debt ratio and median income, will also play a central role in how households choose to dispose of their consumption expenditure.

The survey finds that the overall effect of real interest rate changes on household consumption is ambiguous. Regardless of whether the intertemporal substitution effect seems to dominate in practice, the general mood in the economy as well as the personal circumstances of households will play a decisive role in the actual outcomes.

Place, publisher, year, edition, pages
2019. , p. 39
National Category
Economics
Identifiers
URN: urn:nbn:se:liu:diva-162012ISRN: LIU-IEI-FIL-G--19/02195--SEOAI: oai:DiVA.org:liu-162012DiVA, id: diva2:1370682
Subject / course
Bachelor Thesis in Economics
Supervisors
Examiners
Available from: 2019-11-18 Created: 2019-11-16 Last updated: 2019-11-18Bibliographically approved

Open Access in DiVA

fulltext(700 kB)15 downloads
File information
File name FULLTEXT01.pdfFile size 700 kBChecksum SHA-512
d4074140de90f48685a278981fe90e69aac689ddce1d0574a74c4879c98a5119ab4b21552bd14be26e12a240d6bfbbc317fab006e47defa4ce17abb4d997363f
Type fulltextMimetype application/pdf

By organisation
Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 15 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

urn-nbn

Altmetric score

urn-nbn
Total: 85 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf