Causal Effects of Interest Rate Beliefs on Firm Decisions and their Aggregate Implications

Alina Bartscher, Georg Duernecker, Johannes Goensch and Wehrhöfer, Nils

No 21123, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study firms’ financial and real decisions after an exogenous change in their interest rate beliefs induced by a survey experiment with an information treatment. Firms revise their expectations downward after learning about the European Central Bank’s policy rate. Moreover, we find a reduction in interest rate uncertainty. We link the survey to credit register data and find that treated firms both increase their loan amounts and shift their loan structure toward longer-term, fixed-rate credit with lower interest rates. Using balance sheet data, we also show that treated firms invest more following the RCT. These effects are driven by small firms. We rationalize our findings in a stylized model of firms with imperfect information about the interest rate.

Keywords: Survey experiment; Firm expectations; Incomplete information (search for similar items in EconPapers)
JEL-codes: D14 D15 E21 G51 J26 J32 (search for similar items in EconPapers)
Date: 2026-02
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