Real interest rate

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).

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