IMF Working Papers

The Rationale and Design of Inflation-Indexed Bonds

By Robert T Price

January 1, 1997

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Robert T Price. The Rationale and Design of Inflation-Indexed Bonds, (USA: International Monetary Fund, 1997) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A number of industrialized countries have recently offered inflation-indexed bonds. Some members of another group of countries that had earlier adopted more comprehensive indexation in response to high inflation have taken steps to reduce the scope of indexation in their economies. This paper surveys debt management, monetary policy, and welfare arguments on the use of inflation-indexed bonds, and relates these to the experiences of various issuers. The paper also considers some important design features of indexed bonds.

Subject: Bonds, Consumer price indexes, Financial institutions, Inflation, Inflation-indexed bonds, National accounts, Prices, Return on investment

Keywords: Bonds, Cash flow, Consumer price indexes, Coupon rate, Equilibrium price, Fixed price, Indexed bond, Inflation, Inflation compensation, Inflation country, Inflation expectation, Inflation risk premium, Inflation-indexed bonds, Monetary policy, Price level, Return on investment, Risk premium, Secondary market, Short-term debt, South America, Supply price, WP, Yield gap

Publication Details

  • Pages:

    69

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1997/012

  • Stock No:

    WPIEA0121997

  • ISBN:

    9781451842869

  • ISSN:

    1018-5941