Thresholds for Prime Rate Changes and Tests for Symmetry

Resource Type
Dataset : survey data
  • Dueker, Michael J. (Federal Reserve Bank of St. Louis)
Other Title
  • Archival Version (Subtitle)
Publication Date
Free Keywords
consumer loans; credit card debt; interest rates; loans
  • Abstract

    The popular assertion -- that banks raise loan rates more readily than they lower them in opposite circumstances -- returns to the forefront during every period of declining market interest rates. Perhaps this assertion captures attention because since the 1980s, the ubiquity of credit card balances means that consumer loan rates affect more people than ever. In this article, the author presents specific tests for asymmetric behavior in bank loan rates. The results suggest that the bank prime lending rate, in particular, is slower to decrease than increase. The findings also suggest that one has to put the asymmetry in perspective. The prime rate does not remain far above where it would be in the absence of asymmetry. In addition, the asymmetry probably is the market's response to the rise in default and late payment probabilities that occurs during cyclical downturns in the economy.
  • Table of Contents


    • DS1: Dataset
Geographic Coverage
  • United States
Collection Mode
  • (1) The file submitted,, contains the program and data files. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigators if further information is desired.

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Alternative Identifiers
  • 1231 (Type: ICPSR Study Number)
  • Is previous version of
    DOI: 10.3886/ICPSR01231.v1
  • Dueker, Michael J.. Are prime rate changes asymmetric?. Federal Reserve Bank of St. Louis Review.82, (5), 33-40.2000.

Update Metadata: 2015-08-05 | Issue Number: 6 | Registration Date: 2015-06-15