# Real interest rate

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- Modified: 2023-07-25T21:13:58+00:00
- Language: en

## Definition

A nominal interest rate adjusted by the - actually measured, realized inflation rate or the expected inflation rate (the inflation-adjusted return on invested funds). In the calculation basis of long-term Investment and consumption decisions are based on the expected real interest rate, also known as the EXANTE real interest rate. - If the inflation rate is higher than the interest rate, this is often referred to as a negative real interest rate. - For foreign investments, sometimes also the nominal interest rate taking into account hedging costs (swap rate). - See cost of equity, Fisher parity, inflation differentials, real interest rate argument, interest rate, real. - Cf. Monthly Report of the Deutsche Bundesbank of July 2001, pp. 33 ff; Monthly Report of the ECB of July 2005, pp. 32 ff (measurement of expected changes also in real forward interest rates; overviews); Monthly Report of the Deutsche Bundesbank of December 2008, p. 38 (different real interest rates in the European Monetary Union); Monthly Report of the ECB of July 2014, pp. 33 ff (real interest rate in the EMU as a function of various variables; influence of population aging and changed accounting principles; comparative overviews; references). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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