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  5. Policy Watch: The Introduction of Indexed Government Debt in the United States

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Policy Watch: The Introduction of Indexed Government Debt in the United States

  • David W. Wilcox
Journal of Economic Perspectives
vol. 12, no. 1, Winter 1998
(pp. 219–227)
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Abstract

This article describes the early phases of the development of the market for indexed government debt in the United States. The first such bonds were issued in 1997--one set with a maturity of ten years, the other with a maturity of five years. In the wake of the Treasury issuance, several non-Treasury borrowers have issued indexed debt and several new index-linked products for retail customers have been introduced. As expected, the new indexed notes have 'outperformed' conventional nominal notes in the secondary markets for Treasury debt when bad news has become available about inflation and conversely.

Citation

Wilcox, David W. 1998. "Policy Watch: The Introduction of Indexed Government Debt in the United States." Journal of Economic Perspectives, 12 (1): 219–227. DOI: 10.1257/jep.12.1.219

JEL Classification

  • G12 Asset Pricing; Trading volume; Bond Interest Rates
  • H63 National Debt; Debt Management
  • E62 Fiscal Policy
  • E31 Price Level; Inflation; Deflation
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