Economic and Financial Review


Central Bank of Nigeria (CBN), Research Department


Fisher effect, State space model, Co-integration, Real interest rate, Inflation, Nigeria, Monetary policy


The “Fisher Effect” has stimulated enormous research interest, especially in monetary policy. Expectedly, empirical evidence has varied greatly – from absence of effect to strong effect. This has kept the debate alive, with the benefit of fresh policy-relevant insights and clues especially in developing countries where the literature on the subject is fast growing. This paper contributes to the debate by using the state space model to investigate the dynamic relationship between real interest rate and inflation in Nigeria. The paper reveals varying degrees of effect across interest rate and time horizons.





Recommended Citation

Tule, M. K., Okpanachi, U. M. Adamgbe, E. T. & Smith, S. E. (2014). A test of the fisher effect in Nigeria. CBN Economic and Financial Review (EFR), 52(2), 1-32.



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