AN INFLUENCE OF MARKET INTEREST RATES ON THE HOUSEHOLD SAVING RATE IN THE CZECH REPUBLIC

The issue of an influence of the interest rate on the basic characteristics of consumption of household saving has been at the forefront of empirical research since the 1970s, yet many aspects of this relationship remain the source of a broad polemic. One of the most questionable is the assumption of a causal relationship of interest rate and a tendency to saving. Above all due to the contradictory impacts of the substitution and income effects, the empirical results so far are ambiguous, not very robust and thus not quite stable. The aim of this work is to test a new method of verifying this relationship by dividing households into income categories according to their position in distribution of disposable income combined with the use of different types of market interest rates doing so on the example of the Czech Republic. As indicated by the initial results achieved through panel regression, this new approach could become a relevant enrichment of the interest rate pass-through analysis in relation to households. Repeatedly obtaining of unambiguous and stable results then may significantly assist the central bank in implementing of monetary policy.