Inflation's Grip: Interest Rates Fail to Keep Pace, Impacting Global Economies
The article "Around the world with Irving Fisher" explores how interest rates and inflation were related in different cities from 1825 to 1927. Irving Fisher found that interest rates did not adjust quickly or fully to changes in inflation, contrary to common belief. In his data, interest rates changed less than inflation over time, leading to a persistent negative effect of increased inflation on real interest rates. This challenges the traditional idea of a direct link between inflation and nominal interest rates.