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Fisher effect
In economics, the Fisher effect is the tendency for nominal interest rates to change to follow the inflation rate. It is named after the economist Irving Fisher, who first observed and explained this relationship. Fisher proposed that the real interest rate is independent of monetary measures (known as the Fisher hypothesis), therefore, the nominal interest rate will adjust to accommodate any changes in expected inflation.[1]
- ^ Frank, Robert; Bernanke, Ben; Antonovics, Kate; Heffetz, Ori. Principles of Macroeconomics. McGraw-Hill. pp. 138–139.
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