S
ST6_aspirant
Member
Macroeconomic section of this answer says:
It might be argued that high (low) inflation is associated with high (low) real interest rates, and that this can be unfavourable (favourable) for economic growth and hence equity prices.
But real interest rate = nominal interest rate - inflation
So how is high (low) inflation is associated with high (low) real interest rates?
It might be argued that high (low) inflation is associated with high (low) real interest rates, and that this can be unfavourable (favourable) for economic growth and hence equity prices.
But real interest rate = nominal interest rate - inflation
So how is high (low) inflation is associated with high (low) real interest rates?