01724cas a2200241 a 4500 AALejournalIMF007876 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451859850 1018-5941 BD-DhAAL BD-DhAAL Choi, Woon. The Inverted Fisher Hypothesis : Inflation Forecastability and Asset Substitution" / Woon Choi. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the implications of inflation persistence for the inverted Fisher hypothesis that nominal interest rates do not adjust to inflation because of a high degree of substitutability between money and bonds. It is emphasized that the substitutability between nominal assets and capital renders the hypothesis inconsistent with the data when inflation persistence is high. Using a switching regression model, the analysis allows the reflection of inflation in interest rates to vary according to the degree of inflation persistence or forecastability. The hypothesis is supported by U.S. data only when inflation forecastability is below a certain threshold. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2000/194 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/194/001.2000.issue-194-en.xml IMF e-Library