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Unveiling the Neo-Fisher Effect: Evidence from Pakistan

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  • Hafsa Hina

Abstract

This study aims to examine the relationship between interest rates and inflation in Pakistan, specifically considering the Fisher effect and the non-Fisher effect. The ongoing debate regarding whether raising interest rates contributes to higher inflation rather than effectively controlling it has motivated our research. To investigate this, we utilize time-varying vector auto-regressive and Granger causality tests. Our findings reveal the significance of the neo-Fisher effect, particularly from 2015 onwards, compared to the traditional Fisher effect in Pakistan.

Suggested Citation

  • Hafsa Hina, 2024. "Unveiling the Neo-Fisher Effect: Evidence from Pakistan," Journal of South Asian Development, , vol. 19(3), pages 387-407, December.
    • Handle: RePEc:sae:soudev:v:19:y:2024:i:3:p:387-407
    DOI: 10.1177/09731741241243122
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