Given a home country and a foreign country, the international Fisher effect (IFE) suggests that:

Question

Quizplus · Accepted Answer

The International Fisher Effect (IFE) suggests that the difference in nominal interest rates between two countries is equal to the expected change in exchange rates between their currencies. It does not imply that nominal interest rates or inflation rates are the same, nor does it suggest that exchange rates will move in a similar direction against other currencies.

Given a Home Country and a Foreign Country, the International