The Fisher hypothesis has been a hotly contested topic in monetary economics. Throughout the years it was extensively tested by numerous authors and using varying techniques. This paper seeks to investigate the existence of the Fisher effect in the Euro Area from 1999 to 2011, using the European...

The classical Fisher equation asserts that in a nonstochastic economy, the inflation rate must equal the difference between the nominal and real interest rates. We extend this equation to a representative agent economy with real uncertainty in which the central bank sets the nominal rate of...