Inflation hedging products
Stefania D’Amico and
Thomas King
Chapter 21 in Research Handbook of Financial Markets, 2023, pp 470-489 from Edward Elgar Publishing
Abstract:
We discuss the possibilities for hedging inflation in U.S. financial markets, reviewing the literature and providing some new evidence. We emphasize that there is no one-size-fits-all approach to inflation hedging; the optimal hedge depends on the particular types of prices that an investor is exposed to and their horizons. In addition, the relative attractiveness of different inflation hedging instruments evolves over time, depending on the growth-inflation regime. This is reflected in the inflation risk premium (IRP), which measures the cost of inflation hedging. Our review of the empirical evidence on the IRP embedded in various assets illustrates how, after the global financial crisis, inflation risk evolved into disinflation risk, dictating a negative IRP for nominal bonds and a positive IRP for equities.
Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781800375321/9781800375321.00031.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:20173_21
Ordering information: This item can be ordered from
http://www.e-elgar.com
Access Statistics for this chapter
More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().