Indexed Bonds as an Aid to Monetary Policy
FRB Richmond Economic Review, Vol. 78, No. 1, January/February 1992, pp. 13-23
11 Pages Posted: 7 Nov 2012
A measure of the public’s expectation of inflation would assist the Fed in formulating monetary policy. In order to create such a measure, the U.S. Treasury could issue its debt in two forms: standard debt and debt indexed for inflation. The difference in yield on these two forms of debt would measure the public’s expectation of inflation.
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