Economics

What Happens To Nominal Interest Rates When Inflation Increases?

The Fisher Effect, coined by economist Irving Fisher, describes the relationship between inflation and both real and nominal interest rates. The real interest rate is equal to the nominal interest rate minus the predicted inflation rate, according to the Fisher Effect. As a result, unless nominal rates rise at the same rate as inflation, real

What Happens To Nominal Interest Rates When Inflation Increases? Read More »