The Neo-Fisher Effect: Econometric Evidence from Empirical and Optimizing Models

This paper assesses the presence and importance of neo-Fisher effect in postwar data. It formulates estimates an empirical a New Keynesian model driven by stationary nonstationary monetary real shocks. In accordance with conventional wisdom, temporary increases nominal interest rate are estimated to cause decreases inflation output. The main finding is that permanent shocks increase long run rates, inflation, output short explain about 45 percent changes. (JEL E12, E23, E31, E43, E52)