TY  - JOUR
AU  - Campbell,John Y.
AU  - Shiller,Robert J.
TI  - A Scorecard for Indexed Government Debt
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5587
PY  - 1996
Y2  - May 1996
UR  - http://www.nber.org/papers/w5587
L1  - http://www.nber.org/papers/w5587.pdf
N1  - Author contact info:
John Y. Campbell
Morton L. and Carole S.
Olshan Professor of Economics
Department of Economics
Harvard University
Littauer Center 213
Cambridge, MA 02138
Tel: 617/496-6448
Fax: 617/495-7730
E-Mail: john_campbell@harvard.edu

Robert J. Shiller
Yale University, Cowles Foundation
Box 208281
30 Hillhouse Avenue
New Haven, CT  06520-8281
Tel: 203/432-3708
Fax: 203/432-6167
E-Mail: robert.shiller@yale.edu
M1  - published as John Y. Campbell, Robert J. Shiller. "A Scorecard for Indexed Government Debt," in Ben S. Bernanke and Julio J. Rotemberg, Editors, "NBER Macroeconomics Annual 1996, Volume 11" MIT Press (1996)

AB  - Within the last five years, Canada, Sweden and New Zealand have joined the ranks of the United Kingdom and other countries in issuing government bonds that are indexed to inflation.  Some observers of the experience in these countries have argued that the United States should follow suit.  This paper provides an overview of the issues surrounding debt indexation, and it tries to answer three empirical questions about indexed debt.  First, how different would the returns on indexed bonds be from the returns on existing US debt instruments? Second, how would indexed bonds affect the government's average financing costs?  Third, how might the Federal Reserve be able to use the information contained in the prices of indexed bonds to help formulate monetary policy?  The paper concludes with a more speculative discussion of the possible consequences of increased use of indexed debt contracts by the private sector.
ER  -