Inflation-indexed bonds and nominal bonds : financial innovation and precautionary motives
This paper introduces a two-period monetary general equilibrium model with proportional transaction costs on nominal and inflation-indexed bonds. This paper demonstrates that financial innovation on indexed bonds causes equilibrium interest rates of the nominal bond to increase when agents have prec...
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| Format: | Article |
| Language: | English |
| Published: |
2021
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/151242 |
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| Institution: | Nanyang Technological University |
| Language: | English |