| 31. | But what if aggressive easing does not work, and the economy is dead in the water with zero nominal interest rates?
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| 32. | Looking forward into the future, the expected real interest rate is approximately the nominal interest rate minus the expected inflation rate.
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| 33. | If there is a negative real interest rate, it means that the inflation rate is greater than the nominal interest rate.
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| 34. | To compare the change in purchasing power, the real interest rate ( nominal interest rate minus inflation rate ) should be used.
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| 35. | Looking back into the past, the " ex post " real interest rate is approximately the historical nominal interest rate minus inflation.
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| 36. | This has permitted substantial reductions in nominal interest rates to levels which, in some cases, are below those prevailing before the crisis.
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| 37. | See nominal interest rate, real interest rate and effective interest rate .-- talk ) 12 : 59, 15 September 2008 ( UTC)
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| 38. | In not raising nominal interest rates, it has allowed real interest rates to fall, which seems hardly suitable for America's steaming economy.
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| 39. | Rising inflation, coupled with falling nominal interest rates could bring real interest rates down to dangerously low levels of below 5 %,
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| 40. | When inflation is sufficiently low, the real interest rate can be approximated as the nominal interest rate minus the expected inflation rate.
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