Interest Rates and Inflationary Expectations: Evidence on the Fisher Effect in Sri Lanka

Arusha Cooray

South Asia Economic Journal, 2002, vol. 3, issue 2, 201-216

Abstract: This article examines the relationship between interest rates and inflation for Sri Lanka and whether this relationship is consistent with market efficiency It employs three data frequencies and two approaches, namely, the adaptive and rational expectations approaches for modelling inflationary expectations. While some support is found for the Fisher relationship under both approaches, it is possible to conclude that the strongest support is found for the adaptive expectations approach.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:sae:soueco:v:3:y:2002:i:2:p:201-216

DOI: 10.1177/139156140200300205

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