the effectiveness of increasing interest rate of israel BY DR. ROHAN NASSER OBIED

Abstract:

This article is about the expectations of the rise of the interest rates in Israel and the effects it would have on the economy. The main question that this article discuss is the effectiveness of the increase in the interest rate to control inflation, will it be the right policy. The Central Bank will increase the interest rate when it speculates the rise of inflation above the target rate. The rise in the interest rate will reduce the rate of growth of the economy and rates of inflation. The rise in the interest rate does not affect the consumers equally. Moreover, increase in the interest rates will depreciate against a currency with lower interest rates.

Key Words: interest rates, inflation, rate of growth, consumers

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