Domestic deflation means that the real interest rate on Japanese bonds is higher than the nominal rate.

And so as the government's debt becomes riskier and riskier, people start demanding higher and higher interest rate.

Similarly, a potential downside to quantitative easing is that low interest rates send capital to higher growth, high interest rate countries.

The effective interest rate, effective annual interest rate, annual equivalent rate (AER) or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual compound interest payable in arrears.

If the interest rate is higher than the growth rate, austerity is required the wider the gap, the more austerity is needed.

Interest rate

But higher energy prices, by themselves, will not cause the ECB to pull the interest rate trigger.

A direct effect of the higher interest rate would be to increase the budget deficit and the rate of growth of government debt.

Rate is the periodic interest rate.

With a debt to GDP ratio of 200 , the higher interest rate would eventually raise the government s interest bill by about 4 of GDP.

Nominal interest rate

Market interest rate

Effective interest rate

Interest rate (percentage)

So they want higher interest, interest goes up.

America s Interest Rate Puzzle

China s Interest Rate Challenge

That's the interest rate.

166 effective interest rate.

If inflation turns out to be higher (a very likely outcome of the Fed s recent policy), the interest rate on long term bonds could be correspondingly higher.

By creating more competition for interest income and reducing net interest rate differentials, liberalized interest rates could reduce banks profitability, while SOEs will likely suffer the most, owing to much higher financing costs.

Considered high risk borrowers, SMEs generally have to pay much higher interest rates than larger firms in in many African countries the interest rate exceeds 30 (Kwaku 2003).

If the interest rate is raised too little, banks will use more reserves to support lending, leading to higher inflation. If the interest rate is raised too much, economic activity will be constrained and growth could fizzle.

The rate of failure is higher.

The Real Interest Rate Risk

That's the annual interest rate.

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To define an interest rate fully, allowing comparisons with other interest rates, both the interest rate and the compounding frequency must be disclosed.

Give an interest rate of ten .

Indeed, economic theory suggests that the interest rate differential should be offset on average by depreciation of the currency with the higher interest rate, the differential thus reflecting the compensation required by investors to hold money in relatively risky currencies.

The interest rate spread has stabilized around a more manageable 300 basis points, but is still higher than it was three years ago.

Since China s current benchmark interest rate is higher than the comparable rate in the United States, individuals and institutions have an incentive to keep renminbi as assets and dollars as debt.

The interest rates projected by the CBO assume that future inflation will be only 2.2 . If inflation turns out to be higher (a very likely outcome of the Fed s recent policy), the interest rate on long term bonds could be correspondingly higher.

For countries seeking re entry into international financial markets after the debt crisis, higher real interest rates and a stable exchange rate were prerequisites.

But interest rate convergence caused economic divergence.

Higher international interest rates and a repeated lowering of the exchange rate made servicing the external debt more costly in terms of the national currency.

The second adverse effect of deflation is to raise the real interest rate, that is, the difference between the nominal interest rate and the rate of inflation.

But when prices are falling, the real interest rate exceeds the nominal rate.

Since the interest rate set by the ECB is now less than 1 , there is little difference between its current monetary policy and what the Bank of Spain would do if it could set its own interest rate. But when the euro zone starts to recover, the ECB might choose to raise the interest rate before a higher rate would be appropriate for Spain, which could exacerbate Spanish unemployment.

The yen s weakening will mean higher import costs, and therefore a higher rate of inflation.

It offers a higher rate of benefits and will cover a higher maximum insurable income.

quot that after the Board had decided many years ago to set the interest rate used for lump sum commutations higher than the assumed real rate of return, the matter ceased being purely technical.

Lenders may charge higher interest rates, and the government may charge higher taxes or fees.

But financial decentralization extends beyond interest rate liberalization.

C. Interest rate applicable to lump sum commutations