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Wed 10 Oct, 2018 08:32 pm
Hi,
I just have a question regarding the calculation of nominal interest rates. We are asked to calculate real interest rates using the Fisher equation, where real IR = nominal IR - inflation. In particular we are to use Market economists' inflation expectations – 2-year ahead series for inflation expectations and the Commonwealth Government 2 year bond Yields on Commonwealth government bonds, 2 years maturity. I was just wondering if the Government bond Yield is the same as nominal interest rate? If not, how would I use that to calculate nominal interest rates?
Thanks!