# Capital cost effect

- Canonical URL: https://www.gerhardmerk.de/capital-cost-effect
- Post ID: 588903
- Modified: 2023-07-25T20:59:39+00:00
- Language: en

## Definition

The fact that - an increase in banks' refinancing costs must be passed on to customers. - Rising interest rates for loans, however, sooner or later lead to lower growth in lending and - thus to a dampening of credit-financed demand, primarily for business investment and residential construction. - If interest rates are lowered, additional investment cannot necessarily be expected, because in this case - and especially if interest rates are already low - it is primarily expectations regarding profits that play the decisive role. - See Braking distance, monetary policy. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1