The idea that nominal interest rates rise or fall one-for-one with expected inflation is known as.

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08-02-2022
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The idea that nominal interest rates rise or fall one-for-one with expected inflation is known as.

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Tundexi Tundexi · Answer 1 · 2022-02-18T11:31:26+01:00

The Fisher effect is an economic idea that suggest that the nominal interest rates is expected to rise or fall with the expected inflation.

What is the Fisher effect?

Irving Fisher created the theory of Fisher effect which is the relationship between inflation and both real/ nominal interest.

In conclusion, the Fisher effect is an economic idea that suggest that the nominal interest rates is expected to rise or fall with the expected inflation.