Unveiling the Neo-Fisher Effect: Evidence from Pakistan

Hafsa Hina

Journal of South Asian Development, 2024, vol. 19, issue 3, 387-407

Abstract: This study aims to examine the relationship between interest rates and inflation in Pakistan, specifically considering the Fisher effect and the non-Fisher effect. The ongoing debate regarding whether raising interest rates contributes to higher inflation rather than effectively controlling it has motivated our research. To investigate this, we utilize time-varying vector auto-regressive and Granger causality tests. Our findings reveal the significance of the neo-Fisher effect, particularly from 2015 onwards, compared to the traditional Fisher effect in Pakistan.

Keywords: Interest rate; inflation; time-varying Granger causality; Pakistan (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:soudev:v:19:y:2024:i:3:p:387-407

DOI: 10.1177/09731741241243122

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