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Title:The case for TIPS: An examination of the costs and benefits PDF Logo
Authors:Roush, Jennifer
Dudley, William
Ezer, Michelle Steinberg
Issue Date:2008
Series/Report no.:Staff Report, Federal Reserve Bank of New York 353
Abstract:Several studies have shown that, ex-post, the issuance of Treasury Inflation-Protected Securities (TIPS) has cost U.S. taxpayers money. We propose that evaluations of the TIPS program be more comprehensive and focus on the ex-ante costs of TIPS issuance versus nominal Treasury issuance and, especially when these costs are negligible, the more difficult-to-measure benefits of the program. Our study finds that the ex-ante costs of TIPS issuance versus nominal Treasury issuance are currently about equal and that TIPS provide meaningful benefits to investors and policymakers.
Subjects:Inflation-indexed debt
Treasury Inflation-Protected Securities (TIPS)
liquidity premium
inflation risk premium
JEL:H63
G10
E6
Document Type:Working Paper
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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