Sentences with phrase «distinguish nominal interest»
It's also important to distinguish nominal interest rate from real interest rate, which accounts for the erosion of buying power caused by inflation.
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The only important thing a Neo-Wicksellian would add is that it's important to distinguish between nominal and real rates of interest (real = nominal minus inflation), so if we have a 2 % inflation target we add 2 % to the natural rate to get the «neutral» nominal rate.