TY  - BOOK
AU  - Valadkhani,Abbas
AU  - Arjomandi,Amir
AU  - O'brien,Martin
TI  - Does the interest rate for business loans respond asymmetrically to changes in the cash rate?
SN  - 13504851
AV  - HB1.A666 APP 
PY  - 2013///
CY  - New York
PB  - Taylor and Francis
KW  - Business loan interest rate
KW  - Asymmetric behaviur
KW  - Australia
N2  - This article examines the dynamic relationship between the Reserve Bank of Australia's (RBA's) cash rate and the variable interest rate for lending to small businesses. The relationship is evaluated via an asymmetric GARCH model using monthly data spanning from August 1990 to October 2012. Our results show that a 1 percentage point increase in the cash rate results in an instantaneous 1.086 percentage point rise in the variable rate for small businesses, whereas an equivalent 1 percentage point cut only leads to a 0.862 percentage point fall with a delay of up to 2 months. This outcome has obvious implications for the RBA's monetary policy transmission mechanism and the effectiveness of the expansionary policy versus contractionary policy
UR  - https://doi.org/10.1080/13504851.2012.754540
ER  -