Which improves welfare more: A nominal or an indexed bond?
AbstractEconomists have long argued that loan contracts should be indexed to remove the risks arising from fluctuations in the purchasing power of money: indexation however while eliminating one risk, substitutes another, arising from fluctuations in relative prices of goods. We present a theoretical framework which permits the relative merits of a nominal versus an indexed bond to be assessed in a general equilibrium setting.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 10 (1997)
Issue (Month): 1 ()
Note: Received: July 31, 1995; revised version August 7, 1996
Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00199/index.htm
Find related papers by JEL classification:
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Eichberger, Jürgen & Rheinberger, Klaus & Summer, Martin, 2012.
"Credit risk in general equilibrium,"
Working Paper Series
1445, European Central Bank.
- Jürgen Eichberger & Klaus Rheinberger & Martin Summer, 2014. "Credit Risk in General Equilibrium," CESifo Working Paper Series 4602, CESifo Group Munich.
- Rheinberger, Klaus & Summer, Martin & Eichberger, Jürgen, 2011. "Credit Risk in General Equilibrium," Working Papers 172, Oesterreichische Nationalbank (Austrian Central Bank).
- Michael Magill & Martine Quinzii, .
"Equity, Bonds, Growth And Inflation In A Quadratic Infinite Horizon Economy,"
Department of Economics
98-08, California Davis - Department of Economics.
- Martine Quinzii & Michael Magill & Julian R. Betts, 2003. "Equity, Bonds, Growth And Inflation In A Quadratic Infinite Horizon Economy," Working Papers 988, University of California, Davis, Department of Economics.
- Peters, David W., 2007. "The behavior of government of Canada real return bond returns," International Review of Financial Analysis, Elsevier, vol. 16(2), pages 152-171.
- Patrick Minford & Eric Nowell & Bruce Webb, 2003. "Nominal Contracting and Monetary Targets -- Drifting into Indexation," Economic Journal, Royal Economic Society, vol. 113(484), pages 65-100, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.