IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v37y2009i1p17-21.html
   My bibliography  Save this article

On Indexed Bonds and Aggregate Demand Elasticity

Author

Listed:
  • Ben Kyer
  • Gary Maggs

Abstract

Bonds indexed to the price level or inflation have become popular and more common in the industrialized world. This paper examines the impact of indexed bonds on the price level elasticity of aggregate demand. With a model of aggregate demand based on the standard IS-LM framework and expanded to differentiate between bonds which are indexed to the price level and bonds which are not so indexed, we find that the existence of indexed bonds decreases the elasticity of aggregate demand with respect to the general price level. Copyright International Atlantic Economic Society 2009

Suggested Citation

  • Ben Kyer & Gary Maggs, 2009. "On Indexed Bonds and Aggregate Demand Elasticity," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 17-21, March.
    • Handle: RePEc:kap:atlecj:v:37:y:2009:i:1:p:17-21
    DOI: 10.1007/s11293-008-9151-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11293-008-9151-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11293-008-9151-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gambs, Carl M, 1974. "A Note on Macroeconomic Textbooks: The Use of The Aggregate Demand Curve," Journal of Economic Literature, American Economic Association, vol. 12(3), pages 896-898, September.
    2. Robert J. Shiller, 2003. "The Invention of Inflation-Indexed Bonds in Early America," NBER Working Papers 10183, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cohen, Joseph N & Linton, April, 2010. "The historical relationship between inflation and political rebellion, and what it might teach us about neoliberalism," MPRA Paper 22522, University Library of Munich, Germany.
    2. Alfaro, Laura & Kanczuk, Fabio, 2006. "Sovereign Debt: Indexation and Maturity," IDB Publications (Working Papers) 1578, Inter-American Development Bank.
    3. Laura Alfaro & Fabio Kanczuk, 2006. "Deuda soberana: indexación y vencimiento," Research Department Publications 4460, Inter-American Development Bank, Research Department.
    4. Gilbert Cette & Marielle de Jong, 2013. "Breakeven inflation rates and their puzzling correlation relationships," Applied Economics, Taylor & Francis Journals, vol. 45(18), pages 2579-2585, June.
    5. Juan Angel Garcia & Adrian van Rixtel, 2007. "Inflation-linked bonds from a central bank perspective," Occasional Papers 0705, Banco de España.
    6. Javier L. Arnaut, 2017. "Was Colonialism Fiscally Sustainable? An Empirical Examination of the Colonial Finances of Spanish America," Documentos de Trabajo (DT-AEHE) 1703, Asociación Española de Historia Económica.
    7. Morten Balling & Ernest Gnan & Johannes Holler & Ulrich Bindseil & Nicolas Sauter & Hans J. Blommestein & Maria Cannata & Juha Kilponen & Alessandro Missale & Ewald Nowotny & Guido Sandleris & Mark L., 2013. "The Future of Sovereign Borrowing in Europe," SUERF Studies, SUERF - The European Money and Finance Forum, number 2013/5 edited by Morten Balling & Ernest Gnan & Johannes Holler, May.
    8. Ben L. Kyer & Gary E. Maggs, 2014. "Economic Expansion and The Balance of Trade: The Role of Aggregate Demand Elasticity," The American Economist, Sage Publications, vol. 59(2), pages 176-181, November.
    9. Laura Alfaro & Fabio Kanczuk, 2006. "Sovereign Debt: Indexation and Maturity," Research Department Publications 4459, Inter-American Development Bank, Research Department.
    10. Ben L. Kyer & Gary E. Maggs, 2004. "Implications Of Aggregate Demand Elasticity For The Phillips Curve," New York Economic Review, New York State Economics Association (NYSEA), vol. 35(1), pages 69-76.
    11. Chen, Ren-Raw & Liu, Bo & Cheng, Xiaolin, 2010. "Pricing the term structure of inflation risk premia: Theory and evidence from TIPS," Journal of Empirical Finance, Elsevier, vol. 17(4), pages 702-721, September.
    12. Yue Zhou, 2020. "Rational Kernel on Pricing Models of Inflation Derivatives," Papers 2001.05124, arXiv.org, revised Jan 2020.
    13. Guido Sandleris & Mark J.L Wright, 2013. "GDP-Indexed Bonds: A Tool to Reduce Macroeconomic Risk?," Business School Working Papers 2013-02, Universidad Torcuato Di Tella.
    14. repec:udt:wpbsdt:nombre_del_archivo is not listed on IDEAS

    More about this item

    Keywords

    Aggregate demand; Elasticity; Bond indexation; E00;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:37:y:2009:i:1:p:17-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.