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A Note on Fisher Hypothesis and Price Level Uncertainty

Journal of Financial and Quantitative Analysis 1977 12(3), 525
The theory on the relationship between real and nominal interest rates is based on the well-known Fisher equation:where: i = nominal interest rate;r = real interest rate;λ = percentage change in price level: P /P0 - 1 where P and P0 denote end-of-period and current levels of some aggregate price index, respectively.