The Fischer relation states that the nominal rate of return is approximately the sum of the real rate and the expected rate of inflation.
Rnominal = Rreal + E(inflation)
International Fischer Relation
Combining the Fischer relation with the real interest rate parity (real rates converge across different markets), creates the international Fischer effect:
Rnominal A − Rnominal B = E(inflationA) − E(inflationB)
This states that the different in nominal interest rates between two countries is based on the difference between their expected inflation rates.