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FAQ
What is meant by the Fisher effect?
The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates.
What causes the Fisher effect?
The Fisher effect states how, in response to a change in the money supply, changes in the inflation rate affect the nominal interest rate.
How does the Fisher effect affect the exchange rate?
The International Fisher Effect (IFE) is an economic theory stating that the expected disparity between the exchange rate of two currencies is approximately equal to the difference between their countries’ nominal interest rates.
