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A Generalization of the Fisher Equation

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  • HENRYK KIERZKOWSKI

Abstract

The Fisher equation is generalized by introducing differential expectations. It is argued that borrowers and lenders may adjust their expectations of inflation with different speeds. The appropriate reduced‐form equation for the interest rate is derived and estimated using the data series contained in Fisher's The Theory of Interest.

Suggested Citation

  • Henryk Kierzkowski, 1979. "A Generalization of the Fisher Equation," The Economic Record, The Economic Society of Australia, vol. 55(3), pages 261-266, September.
    • Handle: RePEc:bla:ecorec:v:55:y:1979:i:3:p:261-266
    DOI: 10.1111/j.1475-4932.1979.tb02228.x
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    References listed on IDEAS

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    1. Thomas J. Sargent, 1969. "Commodity Price Expectations and the Interest Rate," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(1), pages 127-140.
    2. Rutledge, John, 1977. "Irving Fisher and Autoregressive Expectations," American Economic Review, American Economic Association, vol. 67(1), pages 200-205, February.
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    Cited by:

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    2. Sukono & Riza Andrian Ibrahim & Moch Panji Agung Saputra & Yuyun Hidayat & Hafizan Juahir & Igif Gimin Prihanto & Nurfadhlina Binti Abdul Halim, 2022. "Modeling Multiple-Event Catastrophe Bond Prices Involving the Trigger Event Correlation, Interest, and Inflation Rates," Mathematics, MDPI, vol. 10(24), pages 1-18, December.

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