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Saving, portfolio and loan decisions of households when interest rates are very low – survey evidence for Austrian households




Do Austrian households adapt their savings and loan decisions in an ultra-low interest rate environment? To answer this question, we analyzed a special OeNB barometer survey conducted in spring 2015 that allows us to assess household interest rate perceptions as well as their impact on saving, portfolio allocation and borrowing decisions. Overall, we find that the very low interest rates were only one of several determinants in savings and loan decisions and have had only a small effect so far. The impact of the ultra-low interest rate environment on portfolio choice is also quite limited. Households that did adapt their portfolio often showed a stronger preference for savings with savings and loan associations than for other options. Furthermore, we observe a shift to real assets. Portfolio rebalancing into riskier assets is not widespread. Many households at the time of the survey considered circumstances relatively favorable for taking out loans. However, this does not imply that loan demand increased strongly, as borrowing decisions are also affected by other, potentially more important determinants. If they were faced with higher loan installments, most households would cut consumption expenditures. The survey results may be useful in assessing e.g. the effectiveness of monetary policy. The modest impact of ultra-low interest rates on savings and portfolio rebalancing into riskier assets suggests that ultra-low interest rates have a limited ability to stimulate aggregate demand through the risk-taking and portfolio rebalancing channels, at least in the case of households in Austria.

Suggested Citation

  • Christian Beer & Ernest Gnan & Doris Ritzberger-Grünwald, 2016. "Saving, portfolio and loan decisions of households when interest rates are very low – survey evidence for Austrian households," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 14-32.
  • Handle: RePEc:onb:oenbmp:y:2016:i:1:b:2

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    References listed on IDEAS

    1. Pirmin Fessler & Peter Mooslechner & Martin Schürz, 2012. "Eurosystem Household Finance and Consumption Survey 2010 First Results for Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 23-62.
    2. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
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    More about this item


    household finance; low interest rates; savings and loan decisions;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance


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