Business and Finance Economics: (Economics of Money and Financial Markets) - Assignment Example

Download file to see previous pages Therefore, to understand economic development in an economic it is essential to determinant interest rate level. The researchers have been constantly engaged to determine economic development by measuring interest rate, as the fluctuation in the investment activities cannot be determined by the investment period. Hence, the interest rate provides detailed information about the economic conditions of the economy by assessing investment condition, financing terms and capital markets. It can be determined by analyzing past trends of interest rate that are controlled and regulated by central banks. However, there are several macroeconomic factors that affected the behavior of short term interest rate of an organization since 2005-2015. The constant fluctuation in the interest rate is persistently affected by the economic events. The unusual historical movement of interest rate is denoted by shifts in equilibrium. Interest rate is considered as a primary tool to determine monetary police and economic activities. With the growing needs for transparency and predictability of monetary policy has persuaded to improve economic activities and inflation rate in an economy that are affected by inflation expectations. The main idea is to determine the impacts of policies on the interest rate changes on the economic growth, assessing investments, capital formation, growth and inflation in an economy. In addition, interest rates are also determined as credible and predictable to determine effectiveness of policies and economic growth.
The present paper aims to investigate what are the major economic determinants that influence short term interest rate of Germany. The main objective is to determine the dominant macroeconomic factors that affect fluctuation and movement. In addition, we examine the information of the interest rate options that are influenced by any of statistical power and macro-economic variables that has ...Download file to see next pagesRead More