TY  - JOUR
AU  - Shiller,Robert J.
TI  - Indexed Units of Account: Theory and Assessment of Historical Experience
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6356
PY  - 1998
Y2  - January 1998
UR  - http://www.nber.org/papers/w6356
L1  - http://www.nber.org/papers/w6356.pdf
N1  - Author contact info:
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
AB  - An indexed unit of account is a money analogue, used to express prices; the unit's" purchasing power is defined by an index.  Indexed units of account are not true money in that" they are not used as a medium of exchange.  The first successful indexed unit of account Unidad de Fomento (UF) has been used in Chile since 1967, and has been copied in Colombia Ecuador, Mexico, and Uruguay.  The reasons for creating such units are discussed from the" standpoint of monetary theory.  The experience with such units in Chile is discussed.  It is argued" that important practical problems in implementing indexation were solved by creating such" indexed units of account.  The existing indexed units of accounts may not be ideal for all" purposes, however, and alternative definitions of the units, relating the units to measures of" income, may also be advantageous.  The indexed units of account might someday be" monetized,' i.e., institutions such as debit cards may be devised to allow the units to be used for" all transactions, so that the role of conventional money might be reduced to clearing-house" functions only.
ER  -