Fisher's Paradox and the Theory of Interest

摘要: Irving Fisher's Theory of Interest has proved to be a most durable and influential contribution economic theory. A central element is the Fisher hypothesis that, over longer term, real rate interest approximately constant, being determined largely by time preference, with movements in nominal reflecting inflation one-for-one. The paradox despite its wide acceptance as cornerstone theory, empirical evidence appears inconsistent hypothesis, at least strictest form. This anomaly was noted himself, who attributed it money illusion. In fifty years following publication Interest, considerable literature evolved around this paradox.' unifying theme common essence hypothesis. Most energy been devoted explaining systematic interest, providing reasons why relationship between may only approximate