How can the risk from the mismatch between inflation rates in mortgage and labor markets be mitigated?

Martin Grandes () and Damia?n Galinsky ()

Revista Ecos de Economía, 2017, vol. 21, issue 45, 40-68

Abstract: This paper proposes a financial instrument to mitigate the risk of a mismatch between inflation and wage variations that would affect the repayment of inflation-indexed mortgages in relatively high inflation economies, where housing finance is at an incipient phase of its development. In particular, using the Argentine experience in 2016-2017, and the empirical evidence of the two preceding decades, three swap/insurance options are proposed and simulated that would allow the debtors to limit their exposure to inflation.

JEL-codes: G01 G21 R31 (search for similar items in EconPapers)
Date: 2017
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https://doi.org/10.17230/ecos.2017.45.3

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Persistent link: https://EconPapers.repec.org/RePEc:col:000442:016192

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