Karatzas, Ioannis; Shubik, Martin; Sudderth, William; … - In: Economic Theory 28 (2006) 3, pp. 481-512
an explicit formula for the long-run rate of inflation, based on the famous Fisher equation. The Fisher equation says the … short-run rate of inflation should equal the nominal rate of interest less the real rate of interest. The long-run Fisher … equation for our stochastic economy is similar, but with the rate of inflation replaced by the harmonic mean of the growth rate …