Lower borrowing costs with inflation-indexed bonds: A trading rule based assessment

A simple trading rule invests in long-term bonds or the risk-free asset based on publicly observed economic variables. The results indicate a predictable inflation risk premium for conventional bonds but no ex-ante risk compensation for indexed bonds. This suggests the government can achieve lower funding costs by issuing indexed debt.

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Year of publication:	2008
Authors:	Reschreiter, Andreas
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 99.2008, 2, p. 272-274
Publisher:	Elsevier

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005257852