The Global Inflation-linked Bond Market: Assessing Conventional Wisdoms
Speaker
Abstract
| Last September, the Dutch Ministry of Finance considered and decided against a proposal to issue inflation-linked bonds. Globally, the inflation-linked bond (ILB) market has grown dramatically, more than doubling in the last five years, with many countries now offering both real and nominal sovereign debt. In addition to the increasing size of most markets, the last five years have witnessed greater coverage along the maturity spectrum, so that in addition to well-developed nominal curves, many countries also have nearly-complete real yield curves to inform policy decisions. Despite the dramatic growth in this market and a significant amount of market commentary related to it, it is still a fairly concentrated market relative to the nominal sovereign markets, both in terms of participants and specialist knowledge. There is relatively little historical experience with these markets through a variety of economic conditions and the complexity of the market leaves many interesting topics for investigation. This paper considers a variety of practical issues in assessing inflation-linked bonds, particularly in light of the current financial crisis. |
| The Erasmus Finance Seminar is jointly sponsored by ERIM and the Tinbergen Institute. |
| Contact information: |
| Marie Dutordoir |
Coordinator
