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Indexed Bonds and Heterogenous Agents

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  • Mayer, T.
Abstract
The widespread belief that one can read off the public's expectations of inflation from the yield differential between indexed and conventional bonds ignores the fact that indexed bonds are held largely by those who expect the most inflation. However, holding indexed bonds as a hedge against inflation implies that such bonds have the advantage of being a relatively cheap source of funds.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Mayer, T., 1993. "Indexed Bonds and Heterogenous Agents," Papers 93-07, California Davis - Institute of Governmental Affairs.
    • Handle: RePEc:fth:caldav:93-07
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    References listed on IDEAS

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    1. Kantor, Laurence G, 1986. "Inflation Uncertainty and Real Economic Activity: An Alternative Approach," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 493-500, August.
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    11. Levhari, David & Liviatan, Nissan, 1976. "Government Intermediation in the Indexed Bonds Market," American Economic Review, American Economic Association, vol. 66(2), pages 186-192, May.
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    13. 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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    Cited by:

    1. James E. Hartley, 1996. "Retrospectives: The Origins of the Representative Agent," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 169-177, Spring.
    2. William Gissy, 1999. "Treasury bill rates and treasury cash reserves," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(4), pages 435-443, December.
    3. Ian Christensen & Frédéric Dion & Christopher Reid, 2004. "Real Return Bonds, Inflation Expectations, and the Break-Even Inflation Rate," Staff Working Papers 04-43, Bank of Canada.

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