Around the world with Irving Fisher

Thorvaldur Gylfason, Helgi Tómasson and Gylfi Zoega

The North American Journal of Economics and Finance, 2016, vol. 36, issue C, 232-243

Abstract: This paper aims to show why Irving Fisher's own data on interest rates and inflation in New York, London, Paris, Berlin, Calcutta, and Tokyo during 1825–1927 suggested to him that nominal interest rates adjusted neither quickly nor fully to changes in inflation, not even in the long run. In Fisher's data, interest rates evolve less rapidly than inflation and change less than inflation over time. Even so, the “Fisher effect” is commonly defined as a point-for-point effect of inflation on nominal interest rates rather than what Fisher actually found: a persistent negative effect of increased inflation on real interest rates.

Keywords: Fisher effect; Inflation; Interest rates (search for similar items in EconPapers)
JEL-codes: E31 E43 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Around the World with Irving Fisher (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:36:y:2016:i:c:p:232-243

DOI: 10.1016/j.najef.2016.01.004

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