The most popular option are Treasury Inflation-Protected Securities (TIPS), which help protect against unexpected inflation
because their interest payments reflect the stated fixed interest plus the inflation amount as measured by the Consumer Price Index (CPI).
After all, bank depositors regularly lose more when unexpected inflation
erodes their savings' real purchasing power (only the nominal value of those deposits is insured).
Bursts of unexpected inflation
redistribute wealth from lenders to borrowers, because each repaid dollar is worth less than when it was borrowed.
Skewness statistics show that unexpected inflation
and changes of expected inflation are positively skewed with the highest positive skewness found in unexpected inflation
and the lowest in changes of expected inflation.
We then examine the relation between the world budget surplus factor and estimated world factors in national output gaps, equity valuation ratios, unexpected inflation
, and military spending.
As a result of unexpected inflation
risks, UK interest rate expectations for this year were themselves pushed back and traders began to close GBP positions.
Inflation and unexpected inflation
are negatively related to insolvency, which rejects Hypothesis 8 (inflation cost hypothesis).
expected inflation unexpected inflation
or inflation uncertainty.
1990) have offered empirical evidence of US REITs are significantly and negatively related to both expected and unexpected inflation
In the meantime, while inflation continues to be muted, the risk of unexpected inflation
In other words, the interest rate on the nominal bond is the real rate, plus the expected inflation rate, plus a risk premium for unexpected inflation
Adams et al (2004) found a negative relationship between unexpected inflation
and stock prices.