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Macroeconomic determinants of MIR interest rate margin in the euro area

Author

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  • Dimitrios Anastasiou

    (Athens University of Economics and Business, Athens, Greece)

Abstract

This study aims to examine the determinants of the MIR interest rate in the Euro area for the period 2003Q1-2015Q3. By employing Fixed and Random Effects as econometric methodologies, I examine whether the MIR rate is affected by the following macroeconomic factors: unemployment rate, inflation rate, GDP growth, political stability index, and wages as percentage of GDP. All these factors have been found to be significant drivers of the MIR rate and thus, they have to be taken into consideration when designing macro-prudential policies. The findings in this paper provide alternative explanations for the empirical evidence concerning interest rate spreads behaviour.

Suggested Citation

  • Dimitrios Anastasiou, 2021. "Macroeconomic determinants of MIR interest rate margin in the euro area," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 10(1), pages 39-53.
    • Handle: RePEc:cbk:journl:v:10:y:2021:i:1:p:39-53
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    References listed on IDEAS

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    More about this item

    Keywords

    MIR interest rate; Interest rate margin; euro area; European Central Bank.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G2 - Financial Economics - - Financial Institutions and Services

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