UK Indexed Gilts: A Case Study of Financial Indexation
What change of market practice has a whole series of the world’s greatest economists, such as Jevons, Marshall, Irving Fisher, Keynes and Milton Friedman, virtually unanimously recommended; a change which practical men in authority, notably Central Bank Governors, have generally firmly resisted as far as they could and have only adopted with the utmost reluctance? The answer is a move to index contracts, especially long-term contracts, for example wages, tax brackets and financial contracts.
KeywordsCentral Banker Financial Instrument Nominal Interest Rate Cash Holding Financial Indexation
Unable to display preview. Download preview PDF.
- 2.J. Tobin and W. Buiter, ‘Fiscal and monetary policies, capital formation, and economic activity’, chapter 11 in J. Tobin, Essays in Economics (Cambridge, Mass: MIT Press, 1982 ).Google Scholar
- 20.C. Goodhart, ‘The economics of “Big Bang”’, Midland Bank Review, Summer 1987, pp. 6–15.Google Scholar