Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/108797 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5257
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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 from 1825 to 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 have more persistence than inflation and change less than inflation over time. The Fisher effect is a misnomer unless it is taken to refer to what Fisher actually found and what his data show: a persistent negative effect of increased inflation on real interest rates.
Subjects: 
Fisher effect
inflation
interest rates
JEL: 
E31
E43
Document Type: 
Working Paper
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