My post-graduate student has been interested to carry out a research work on if interest rate impacts on saving depositors' banking behaviours. Could you please share papers on this issue?
From a simple macroeconomic illustration, the interest rate is a monetary tool used by the Central Bank to inject or withdraw cash into/from the economy. Therefore, once the rate goes up, this pushes up the interest rate set by the commercial banks, thus economic agents such as individuals and businesses would be encouraged to save more in the banks. However, the reverse behavior is expected from individuals and businesses when rates are down.
For past papers, I would recommend you checking Jstor too.
We suggest that a more effective Central Bank negative deposit rate should be completely passed on to the current deposits of banks (that are still exploding in the Euro area and elsewhere). Therefore effective negative rates require that cash is also taxed. When this problem will be solved (there are solutions), depositors will choose for long-term investments instead of hoarding money. Maturity transformation risks will decline and financial stability as well as the economic situation as a whole will be improved.