Natália Teixeira
Affiliation: ISG -Business & Economics School, Lisbon, Portugal, CEFAGE and CIGEST
Email: [email protected]
Abstract: This study examines the influence of real interest rates, inflation and household disposable income on the Portuguese economy, utilising data from the past two decades and employing the Fisher model. The research assesses the interrelationships between inflation, real interest rates and household savings, with a particular focus on the contrasting dynamics observed during periods of economic crisis, such as the 2008 global financial crisis and the ongoing impact of the SARS-CoV-2 pandemic, and periods of relative stability. The results demonstrate a moderate correlation between real interest rates and savings over the analysed period, with a more pronounced response in crisis scenarios. Furthermore, the presence of negative interest rates associated with expansionary monetary policies does not prevent the growth of precautionary savings during crises. The study emphasises the necessity for supplementary economic policies that integrate factors such as household confidence and expectations, particularly during periods of economic instability
Keywords: Interest Rates; Inflation; Fisher Model; Household Savings; Economic Crisis.