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A Note on Fisher Hypothesis and Price Level Uncertainty

Published online by Cambridge University Press:  19 October 2009

Y. Amihud  and
A. Barnea
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Extract

The theory on the relationship between real and nominal interest rates is based on the well-known Fisher equation:

where: i = nominal interest rate;

r = real interest rate;

λ = percentage change in price level: P /P0 - 1 where P and P0 denote end-of-period and current levels of some aggregate price index, respectively.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 12 , Issue 3 , September 1977 , pp. 525 - 530
Copyright
Copyright © School of Business Administration, University of Washington 1977

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References

REFERENCES

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