The Effect of an Increase in the Interest Rate and Inflation on Personal Finances in Islamic Republic of Pakistan
DOI:
https://doi.org/10.53762/alqamar.06.03.e05Keywords:
Lending, interest rate, inflation rate, Covid-19, borrower, lenders, cost of living, Islamic Republic of PakistanAbstract
Increasing rate of inflation has been one of the most essential problems, especially after period of Covid-19 and Russia Ukraine War, which also tends to increase in the rate of interest rate. Therefore, researcher has particularly analysed the impact of inflation and interest rate on personal finances. Primary quantitative research method has been used using survey questionnaire, and information has been collected from 100 households using convenience sampling. For data analysis, statistical tools (. e. descriptive, reliability, and inferential statistics) were used via using SPSS software. It shows that both male and female from different age group has been participated in the current research. Hence, findings revealed that inflation rate has a negative influence on personal finance, while interest rate has a positive influence on personal finance. Findings in the current research have been primarily focused on primary quantitative research that can be used in secondary studies in future for in-depth analysis. Additionally, consideration of control variables (i.e., income, accessibility to banking institutions, and facilities provided for personal finances) can also be used to avoid biased results.
References
Pan, Huifeng, and Hong-Youl Ha. "When do interest rates matter? Two methodological approaches to loyalty." Asia Pacific Journal of Marketing and Logistics 32, no. 1 (2020): 46-64.
Binder, Carola. "Coronavirus fears and macroeconomic expectations." Review of Economics and Statistics 102, no. 4 (2020): 721-730.
Breeden, Douglas T., and Robert H. Litzenberger. "Central Bank Policy Impacts on the Distribution of State Prices for Future Interest Rates, 2003–2022." The Journal of Fixed Income 32, no. 2 (2022): 64-92.
Ribeiro, Humberto Nuno Rito, and Bernardo Ribeiro Pereira. "A brave new world of low interest rates to mitigate the effects of the financial and pandemic crises." Economic and Social Development: Book of Proceedings (2021): 78-86.
Anari, Ali, and James Kolari. "Dynamics of interest and inflation rates." Journal of Empirical Finance 39 (2016): 129-144.
Lusardi, Annamaria. "Financial literacy and the need for financial education: evidence and implications." Swiss Journal of Economics and Statistics 155, no. 1 (2019): 1-8.
Xiao, Jing Jian, and Chunsheng Tao. "Consumer finance/household finance: the definition and scope." China Finance Review International 11, no. 1 (2021): 1-25.
Ekong, Christopher Nyong, and Ubong Edem Effiong. "Economic determinants of household consumption expenditures in West Africa: A Case Study of Nigeria and Ghana." GSJ 8, no. 9 (2020): 385-398.
TELEK, Cebrail, and Seyit Ali MİÇOOĞULLARI. "The Effect of Macroeconomic Variables on Private Savings in BRICS-T Economies." İktisadi İdari ve Siyasal Araştırmalar Dergisi 7, no. 19 (2022): 434-447.
Motau, Andries Molatelo. "Fire as an agent of change: the social, economic and environmental impacts of the Knysna fires." PhD diss., 2019.
Andersen, Steffen, John Y. Campbell, Kasper Meisner Nielsen, and Tarun Ramadorai. "Sources of inaction in household finance: Evidence from the Danish mortgage market." American Economic Review 110, no. 10 (2020): 3184-3230.
Aizenman, Joshua, Yin-Wong Cheung, and Hiro Ito. "The interest rate effect on private saving: Alternative perspectives." Journal of International Commerce, Economics and Policy 10, no. 01 (2019): 1950002.
Kumar, Saten, Hassan Afrouzi, Olivier Coibion, and Yuriy Gorodnichenko. Inflation targeting does not anchor inflation expectations: Evidence from firms in New Zealand. No. w21814. National Bureau of Economic Research, 2015.
Coibion, Olivier, Dimitris Georgarakos, Yuriy Gorodnichenko, and Michael Weber. "Forward guidance and household expectations." Journal of the European Economic Association (2023): jvad003.
Xiao, Jing Jian, and Chunsheng Tao. "Consumer finance/household finance: the definition and scope." China Finance Review International 11, no. 1 (2021): 1-25.
Pan, Huifeng, and Hong-Youl Ha. "When do interest rates matter? Two methodological approaches to loyalty." Asia Pacific Journal of Marketing and Logistics 32, no. 1 (2020): 46-64.
Aizenman, Joshua, Yin-Wong Cheung, and Hiro Ito. "The interest rate effect on private saving: Alternative perspectives." Journal of International Commerce, Economics and Policy 10, no. 01 (2019): 1950002.
Andersen, Steffen, John Y. Campbell, Kasper Meisner Nielsen, and Tarun Ramadorai. "Sources of inaction in household finance: Evidence from the Danish mortgage market." American Economic Review 110, no. 10 (2020): 3184-3230.
Xiao, Jing Jian, and Chunsheng Tao. "Consumer finance/household finance: the definition and scope." China Finance Review International 11, no. 1 (2021): 1-25.
Xiao, Jing Jian, and Chunsheng Tao. "Consumer finance/household finance: the definition and scope." China Finance Review International 11, no. 1 (2021): 1-25
Coibion, Olivier, Dimitris Georgarakos, Yuriy Gorodnichenko, and Michael Weber. "Forward guidance and household expectations." Journal of the European Economic Association (2023): jvad003.
Anari, Ali, and James Kolari. "Dynamics of interest and inflation rates." Journal of Empirical Finance 39 (2016): 129-144.
Xiao, Jing Jian, and Chunsheng Tao. "Consumer finance/household finance: the definition and scope." China Finance Review International 11, no. 1 (2021): 1-25.
Published
How to Cite
Issue
Section
Copyright (c) 2023 Al-Qamar
This work is licensed under a Creative Commons Attribution 4.0 International License.