Although the popular press often labels
inflation-indexed bonds as "exotic securities," nothing could be farther from reality.
18726), Richard Clarida derives a structural relationship between the nominal exchange rate, national price levels, and observed yields on long maturity
inflation-indexed bonds.
Spain must cut the public shortfall from 8.9 percent of gross domestic product to 4.5 percent in 2013, however economists fear
inflation-indexed pension hikes could make that target impossible as prices rise.
The topics discussed include rediscovering the macroeconomic roots of financial stability policy,
inflation-indexed bonds and the expectations hypothesis, the economics of credit default swaps, equilibrium in the initial public offering market, and carry trade and momentum in currency markets.
The
inflation-indexed bond, which carries a coupon of 4.375%, is part of a liability management transaction aimed at strengthening the sovereign's external debt profile.
One is the spread between nominal Treasuries and
inflation-indexed Treasuries, and the other is inflation swap rates.
The Ministry of Strategy and Finance has announced plans to spur trading in
inflation-indexed government bonds, as part of an effort to diversify the Korea Treasury Bond (KTB) market.
The company has issued USD79m in
inflation-indexed, 10-year bonds at a yield of 3.45 percent, and USD59.3m in
inflation-indexed 25-year bonds at a yield of 3.73 percent.
The Statistical Service said that this was partly due to the (
inflation-indexed) Cost of Living Allowance (C.O.L.A.) on the gross earnings of employees, which resulted in the decrease of salaries by 1.44% from July 2009.
Treasury Inflation-Protection Securities were first issued in January 1997 and are currently available in the form of 5-year, 10-year, and 30-year
inflation-indexed notes.
It was a rare case that gave the diehard advocates of the
inflation-indexed wage adjustment mechanism (ATA) a bitter taste of their own medicine: salaries subject to ATA suffered a decrease (albeit a bearably noticeable one) rather than the typical increase imperceptibly enjoyed for the last 26 years.
