More RRBs, Please! Why Ottawa Should Issue More Inflation-Indexed Bonds
Financial instruments indexed to the general price level are of great potential use to borrowers and lenders alike. But up until recently, they have been relatively scarce – in part because private borrowers dislike offering protection against inflation that they do not control. Since the early 1980s, several developed-country governments have begun issuing price-level-linked bonds, and these bonds now constitute a large share of some countries’ total debt issue. This study argues that Canada’s federal government, which began issuing real-return bonds (RRBs) in 1991, should issue more RRBs of more types than it currently plans to do. Issuing more RRBs would not only better satisfy existing demand from investors, it has the potential to spur the development of other price-indexed instruments. Experience elsewhere suggests that more federal RRBs could encourage other entities to issue price-indexed debt, and would let intermediaries provide such products as inflation-linked annuities, thus providing more Canadian savers with protection against intentional or accidental inflation.
Volume (Year): (2012)
Issue (Month): 363 (September)
|Contact details of provider:|| Postal: 67 Yonge St., Suite 300, Toronto, Ontario M5E 1J8|
Phone: (416) 865-1904
Fax: (416) 865-1866
Web page: http://www.cdhowe.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Juan Angel Garcia & Adrian van Rixtel, 2007.
"Inflation-linked bonds from a central bank perspective,"
0705, Banco de España;Occasional Papers Homepage.
- Juan Angel Garcia & Adrian van Rixtel, 2007. "Inflation-linked bonds from a Central Bank perspective," Occasional Paper Series 62, European Central Bank.
- Reinhart, Carmen, 2009.
"The Second Great Contraction,"
21485, University Library of Munich, Germany.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, volume 1, number 8973.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009.
"Varieties of Crises and Their Dates
[This Time Is Different: Eight Centuries of Financial Folly]," Introductory Chapters, Princeton University Press.
- David Longworth, 2012. "Combatting the Dangers Lurking in the Shadows: The Macroprudential Regulation of Shadow Banking," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 361, September.
- Gregor W. Smith, 2009. "The Missing Links: Better Measures of Inflation and Inflation Expectations in Canada," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 287, April.
- Benjamin Dachis & William B.P. Robson, 2012. "From Living Well to Working Well: Raising Canada's Performance in Non-residential Investment," e-briefs 137, C.D. Howe Institute.
When requesting a correction, please mention this item's handle: RePEc:cdh:commen:363. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.