DEFINITION of 'Nominalism'

The principle of keeping the amount of a debt obligation fixed despite fluctuations in the money's purchasing power or exchange rate.

BREAKING DOWN 'Nominalism'

Nominalism puts the risk of depreciation on the creditor and the risk of appreciation on the debtor.

RELATED TERMS
  1. Nominal Interest Rate

    The interest rate before taking inflation into account. The equation ...
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  3. Nominal Yield

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  4. Real Rate Of Return

    The annual percentage return realized on an investment, which ...
  5. Nominal

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Related Articles
  1. Investing

    What Does Nominal Mean?

    Nominal refers to an unadjusted value or change in value.
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    What is a Nominal Value?

    The nominal value of a security, such as a stock or bond, remains fixed for the duration of its life.
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    Interest Rates Explained: Nominal, Real, Effective

    Interest rates are divided into subcategories. Smart investors look beyond the nominal or coupon rate of a bond or loan to see if it fits their objectives.
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    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  5. Investing

    Explaining Fixed Exchange Rates

    A government using a fixed exchange rate has linked the value of its currency to the value of another country’s currency, or the price of gold.
  6. Insights

    What Is Purchasing Power?

    Purchasing power expresses money’s value by defining the amount of goods or services it can buy.
  7. Insights

    Interest Rates: Nominal and Real

    An interest rate is the cost of borrowing money, expressed as a percentage of the loan amount. Interest rates are the primary yardstick for measuring how much return lenders will get. However, ...
  8. Investing

    What are Accounting Principles?

    The term accounting principles refers to rules and guidelines companies use to help them record their business and financial transactions.
  9. Insights

    The International Fisher Effect: An Introduction

    The Fisher models have the ability to illustrate the expected relationship between interest rates, inflation and exchange rates.
RELATED FAQS
  1. How do nominal interest rates in finance differ from the nominal rate of interest ...

    Read about the subtle difference between a financial instrument's nominal interest rate of return and the general nominal ... Read Answer >>
  2. How were nominal interest rates in the economy set before the Federal Reserve?

    Learn more about how nominal interest rates are determined, how the Federal Reserve targets them, and how they acted prior ... Read Answer >>
  3. Under what circumstances is the nominal value out of line with the real value of ...

    Learn more about nominal stock values and market values. Explore causes of differences between nominal and real values for ... Read Answer >>
  4. What is the difference between real and nominal interest rates?

    Learn what nominal interest rates and real interest rates are, how real interest rate takes into account the inflation rate, ... Read Answer >>
  5. Is the nominal value of a security ever also the real value?

    Learn more about nominal values and real values. Find out how these market values change and if they may ever converge for ... Read Answer >>
  6. How can you calculate the difference between nominal value and real value of stock ...

    Explore the impact of real value and nominal value on stock trading. Find out how these values are assigned and what causes ... Read Answer >>
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