Which improves welfare more: A nominal or an indexed bond?

Michael Magill and Martine Quinzii

Economic Theory, 1997, vol. 10, issue 1, 37 pages

Abstract: Economists 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.

JEL-codes: D52 E31 (search for similar items in EconPapers)
Date: 1997
Note: Received: July 31, 1995; revised version August 7, 1996
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Related works:
Working Paper: WHICH IMPROVES WELFARE MORE: NOMINAL OR INDEXED BOND? (2004)
Working Paper: Which Improves Welfare More: Nominal or Indexed Bond ? (1995)
Working Paper: Which Improves Welfare More: Nominal or Indexed Bond? (1995)
Working Paper: Which Improves Welfare More: Nominal or Indexed Bond? (1995)
Working Paper: Which Improves Welfare More: Nominal or Indexed Bond? (1995)
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