EconPapers    
Economics at your fingertips  
 

The Effect of Interest Rates on Economic Growth

Sergey Drobyshevsky, Alexandra Bozhechkova, Pavel Trunin and Elena Sinelnikova-Muryleva
Additional contact information
Elena Sinelnikova-Muryleva: Gaidar Institute for Economic Policy

Working Papers from Gaidar Institute for Economic Policy

Abstract: This paper explores the mechanisms, direction and extent to which interest rates can affect economic growth. The authors analyze theoretical concepts and international economic practices in high-interest-rate environments to justify that high nominal and real interest rates may not dampen economic growth if there are mechanisms such as low inflation expectations, economy’s attractiveness to foreign investors, the technological transfer effect, the accumulation of domestic savings. By using a structural vector autoregression (VAR) to evaluate econometrically the effectiveness of the interest rate channel of Bank of Russia’s monetary policy transmission mechanism, the paper provides evidence to suggest that interest rate policy is partially efficient after the global financial crisis.

Keywords: monetary policy; inflation; inflation expectations; nominal interest rate; real interest rate; economic growth; interest rate channel; SVAR model (search for similar items in EconPapers)
JEL-codes: E20 E31 E52 E58 G15 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2017, Revised 2017
New Economics Papers: this item is included in nep-cis, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://iep.ru/files/RePEc/gai/wpaper/wpaper-2017-300.pdf Revised version, 2017 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gai:wpaper:wpaper-2017-300

Access Statistics for this paper

More papers in Working Papers from Gaidar Institute for Economic Policy Contact information at EDIRC.
Bibliographic data for series maintained by Victor Hugues ().

 
Page updated 2020-07-01
Handle: RePEc:gai:wpaper:wpaper-2017-300