The case for TIPS: an examination of the costs and benefits
AbstractSeveral studies have shown that, ex-post, the issuance of Treasury Inflation-Protected Securities (TIPS) has cost U.S. taxpayers money. We propose that evaluations of the TIPS program be more comprehensive and focus on the ex-ante costs of TIPS issuance versus nominal Treasury issuance and, especially when these costs are negligible, the more difficult-to-measure benefits of the program. Our study finds that the ex-ante costs of TIPS issuance versus nominal Treasury issuance are currently about equal and that TIPS provide meaningful benefits to investors and policymakers.
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Bibliographic InfoPaper provided by Federal Reserve Bank of New York in its series Staff Reports with number 353.
Date of creation: 2008
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-07 (All new papers)
- NEP-CBA-2008-12-07 (Central Banking)
- NEP-FMK-2008-12-07 (Financial Markets)
- NEP-MAC-2008-12-07 (Macroeconomics)
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