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Fisher Effect
(redirected from Fisher hypothesis)

   Also found in: Wikipedia 0.01 sec.
Fisher effect
A theory that nominal interest rates in two or more countries should be equal to the required real rate of return to investors plus compensation for the expected amount of inflation in each country.

Fisher Effect
A theory stating that real interest rates are independent of monetary considerations. According to the Fisher effect, a currency's real interest rate is equal to its nominal interest rate less the inflation rate. Thus, if the inflation rate rises, the real interest rate eventually rises as well; likewise, if inflation falls, the real interest rate will fall. See also: International Fisher Effect.

Fisher effect
The direct relationship between inflation and interest rates. Increasing inflationary expectations result in increasing interest rates.


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Our primary purpose is not to test the Fisher hypothesis in Africa but to discover the relative performance of African stock markets in protecting investors against inflation and encouraging the growth of savings and investment.
22) In the spirit of the Fisher hypothesis, one may argue that the real interest rate is expected to be stationary.
 
 
 
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