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Suppose that the nominal interest rate in the euro area is 1.47 %, and the nominal interest rate in Switzerland is 2.71%. Suppose inflation is
Suppose that the nominal interest rate in the euro area is 1.47 %, and the nominal interest rate in Switzerland is 2.71%. Suppose inflation is expected to be 0.63% in the euro area.
If the Fisher Effect holds, the expected inflation in Switzerland is ______ %. Hint: what does the Fisher Effect say about real interest rates?
Include two decimal places in your answer.
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