Interaction between Interest Rate and Perceived Inflation Policy Implication for Controlling Inflation

HO-YIN, YUE and PO-TAN, LAU and TAK-CHING, LAU (2016) Interaction between Interest Rate and Perceived Inflation Policy Implication for Controlling Inflation. In: Fifth International Conference On Advances In Economics, Social Science and Human Behaviour Study - ESSHBS 2016, 25-26 September 2016, Bangkok, Thailand.

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Abstract

An usual method for policy makers to control inflation is manipulating interest rates. This study checks the effectiveness of using interest rates as a method to control the inflation by studying the relation between interest rate and perceived inflation. 200 undergraduate students were invited in an experiment. Our findings show there is no main effects for bank interest rate and actual inflation rate on perceived inflation. However, a significant interaction effect was found between bank interest rate, personal income and actual inflation rate on perceived inflation.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Interest rate, Personal Income, Expected Inflation, Perceived Inflation, Monetary Policy
Depositing User: Mr. John Steve
Date Deposited: 20 Mar 2019 11:32
Last Modified: 20 Mar 2019 11:32
URI: http://publications.theired.org/id/eprint/690

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