Abstract
Why are contracts not fully indexed? In a setting in which fully indexed contracts are feasible, we find that when price-level data are gathered with delay, these contracts are not renegotiation-proof. The contracts that replace them entail a lower level of welfare for the parties to that contract. They also imply that real variables respond to nominal shocks.
Original language | English (US) |
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Pages (from-to) | 700-708 |
Number of pages | 9 |
Journal | Journal of Political Economy |
Volume | 105 |
Issue number | 4 |
DOIs | |
State | Published - Aug 1997 |
ASJC Scopus subject areas
- Economics and Econometrics