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Laetitia Lorens
on Nov 16, 2024

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In a period of inflation real interest rates will be greater than nominal interest rates.

Real Interest Rates

This is the interest rate after inflation adjustment, demonstrating the true cost of loans or the actual gains from savings accounts.

Nominal Interest Rates

The interest rates before adjustments for inflation, indicating the gross return on financial investments or loans.

Inflation

The rate of increase in the general price index for goods and services, leading to a decrease in how much can be bought.

  • Assess the correlation between nominal, real interest rates, and the levels of inflation.
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Fatma DemirgilNov 19, 2024
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