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The case for TIPS: an examination of the costs and benefits

William Dudley, Michelle Steinberg Ezer and Jennifer E. Roush

No 353, Staff Reports from Federal Reserve Bank of New York

Abstract: Several studies have shown that, ex-post, the issuance of Treasury Inflation-Protected Securities (TIPS) has cost U.S. taxpayers money. We propose that evaluations of the TIPS program be more comprehensive and focus on the ex-ante costs of TIPS issuance versus nominal Treasury issuance and, especially when these costs are negligible, the more difficult-to-measure benefits of the program. Our study finds that the ex-ante costs of TIPS issuance versus nominal Treasury issuance are currently about equal and that TIPS provide meaningful benefits to investors and policymakers.

Keywords: Government securities; Treasury bonds; Inflation risk; Liquidity (Economics) (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-cba, nep-fmk and nep-mac
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Citations: View citations in EconPapers (6)

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Journal Article: The case for TIPS: an examination of the costs and benefits (2009) Downloads
Working Paper: The case for TIPS: an examination of the costs and benefits (2009) Downloads
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