Fisher Effect（费雪效应）.docVIP

Fisher Effect（费雪效应） Fisher effect English: Fisher Effect concept Fisher Effect is by the famous economist irving Fisher first reveals the relationship between inflation expectations and the interest rate of a discovery, it points out that when the rising rate of inflation expectations, interest rates will rise. The popular explanation is that if the interest rate on bank savings is 5%, someones deposit is 5% more a year later, is he rich? This is an ideal assumption. If inflation was 3%, he was only 2% richer. If it was 6 percent, what he could have bought 100 yuan a year ago is now 106, and the money saved for a year is only 105 yuan, and he cant afford it! Formula real interest rate = nominal interest rate - inflation rate So if you swap the left and the right side of the formula, the formula becomes: Nominal interest rate = real interest rate + inflation rate Under some economic system, real interest rates tend to be constant, because it represents your actual purchasing power. So when the rate of inflation changes, in order to get the balance of the formula, the nominal interest rate -- that is, the interest rate that is published on the banks interest rate -- will change accordingly. The rise in nominal interest rates is exactly the same as the rate of inflation, which is called the fisher effect or the fisher hypothesis. According to irving fisher, the nominal interest rate is the sum of the expected price changes during the lifetime of the real interest rate and the financial instrument. The nominal rate of interest can be expressed as: 1 + r = (1 + r) (1 + a) R = r + a + Ra In the formula: R -- real interest rate; A -- the expected annual inflation rate during the lifetime of financial instruments. When the inflation rate is only at a normal level, the product item Ra will be small, and the calculation is usually ignored, thus: R = r + a Traditionally, the formula is called fisher effect, it shows that the nominal interest rate (including inflation) at a pre