International Fisher relationship

Definition:

Theory that nominal interest rates and inflation rates in different countries are connected. The Fisher equation says the nominal interest rate is the product of one plus the real interest rate times one plus the expected rate of inflation.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Measurement error

Errors in measuring an explanatory variable in a regression, which leads to biases in estimated parameters.

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