were created to eliminate inflation uncertainty. Holders of indexed bonds are assured that the real cash flow of the bond (principal plus interest) will not be affected by inflation.

Cost-benefit analysis

As detailed by Steve Hanke, Philip Carver, and Paul Bugg (1975), cost benefit analysis can be greatly distorted if the exact Fisher equation is not applied. Prices and interest rates must both be projected in either real or nominal terms.

Monetary policy

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