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Indexed bonds as an aid to monetary policy

Author

Listed:
  • Robert L. Hetzel

Abstract

A measure of the public’s expectation of inflation would assist the Fed in formulating monetary policy. In order to create such a measure, the U.S. Treasury could issue its debt in two forms: standard debt and debt indexed for inflation. The difference in yield on these two forms of debt would measure the public’s expectation of inflation.

Suggested Citation

  • Robert L. Hetzel, 1992. "Indexed bonds as an aid to monetary policy," Economic Review, Federal Reserve Bank of Richmond, issue Jan, pages 13-23.
  • Handle: RePEc:fip:fedrer:y:1992:i:jan:p:13-23:n:v.78no.1
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich199201.pdf
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    References listed on IDEAS

    as
    1. Alicia H. Munnell & Joseph B. Grolnic, 1986. "Should the U.S. government issue index bonds?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 3-21.
    2. Thomas M. Hymphrey, 1974. "The concept of indexation in the history of economic thought," Economic Review, Federal Reserve Bank of Richmond, issue Nov, pages 1-16.
    3. Woodward, G Thomas, 1990. "The Real Thing: A Dynamic Profile of the Term Structure of Real Interest Rates and Inflation Expectations in the United Kingdom, 1982-89," The Journal of Business, University of Chicago Press, vol. 63(3), pages 373-398, July.
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    Citations

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    Cited by:

    1. Marvin Goodfriend, 1993. "Interest rate policy and the inflation scare problem: 1979-1992," Proceedings, Board of Governors of the Federal Reserve System (U.S.).
    2. Soderlind, Paul & Svensson, Lars, 1997. "New techniques to extract market expectations from financial instruments," Journal of Monetary Economics, Elsevier, vol. 40(2), pages 383-429, October.
    3. Robert L. Hetzel, 1993. "A quantity theory framework for monetary policy," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 35-48.
    4. Robert Darin & Robert L. Hetzel, 1995. "An empirical measure of the real rate of interest," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 17-47.
    5. Thomas Mayer, 1998. "Indexed Bonds And Heterogeneous Agents," Contemporary Economic Policy, Western Economic Association International, vol. 16(1), pages 77-84, January.
    6. Peter N. Ireland, 1996. "Long-term interest rates and inflation: a Fisherian approach," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 21-36.
    7. Andreas Reschreiter, 2010. "Indexed bonds and revisions of inflation expectations," Annals of Finance, Springer, vol. 6(4), pages 537-554, October.
    8. Juan Angel Garcia & Adrian van Rixtel, 2007. "Inflation-linked bonds from a central bank perspective," Occasional Papers 0705, Banco de España;Occasional Papers Homepage.
    9. Ben Watt & Michael Reddell, 1997. "Some perspectives on inflation-indexed bonds," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 60, December.
    10. Bell, David N.F. & Levin, Eric J. & Wright, Robert E., 1997. "Indexed Bonds, Expected Inflation and Tax Clientele Bias," National Tax Journal, National Tax Association, vol. 50(2), pages 315-320, June.

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