INDEXED BONDS AND HETEROGENEOUS AGENTS

The widespread belief that one can read off the public's expectations of inflation from the yield differential between indexed and conventional bonds ignores the fact that indexed bonds are held largely by those who expect the most inflation. However, holding indexed bonds as a hedge against inflation implies that such bonds have the advantage of being a relatively cheap source of funds. Copyright 1998 Western Economic Association International.

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Year of publication:	1998
Authors:	MAYER, THOMAS
Published in:	Contemporary Economic Policy. - Western Economic Association International - WEAI, ISSN 1074-3529. - Vol. 16.1998, 1, p. 77-84
Publisher:	Western Economic Association International - WEAI

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004981304