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An International Survey of Indexing and Its Effects

Published online by Cambridge University Press:  26 March 2020

S.A.B. Page  and
Sandra Trollope
S.A.B. Page
Affiliation:
National Institute of Economic and Social Research
Sandra Trollope
Affiliation:
National Institute of Economic and Social Research
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Extract

Though it has become increasingly popular, indexation is not a new idea. As early as 1742 Massachusetts had an issue of bonds based on a few commodities and Jevons in 1875 and Marshall in 1886 advocated the use of a standard unit of purchasing power in contracts for deferred payments.

Type
Articles
Information
National Institute Economic Review , Volume 70 , November 1974 , pp. 46 - 59
Copyright
Copyright © 1974 National Institute of Economic and Social Research

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References

page 46 note (1) In non-market economies, Hungary compensates for price and rent increases by administrative action to adjust wages and other benefits, and in the early 1950s China operated a system of guarantees in terms of four basic commodities for bank loans and deposits. (See D. Finch ‘Purchasing power guaran tees for deferred payments’, IMF Staff Papers, 1956, 1, page 20).

page 46 note (2) Australia, Belgium, Brazil and Canada have had variable rates for mortgages, and the United Kingdom, for mortgages and loans.

page 46 note (3) In addition Germany, which now discourages all forms of indexing, tied many contracts to the price of rye between 1919 and 1923.

page 46 note (4) Taxes, indexed by Canada, Brazil, Iceland and the Netherlands, are discussed on page 61 below.

page 52 note (1) References to the OECD are in all cases to an average weighted by GDP.

page 52 note (2) References in square brackets are listed on page 60.

page 52 note (3) [18] page 335.

page 53 note (1) Finch, op. cit.

page 57 note (1) [16], April 1969.

page 57 note (2) [15], page 19.

page 58 note (1) [39], page 116.

page 59 note (1) According to Hugh Stephenson in the Times, 23 September 1974, ‘Inflation in the last 18 months has … removed more “wealth” from the hands of the privately rich than any government, no matter how radical, would have dared to do with a wealth tax.

‘Secondly … it has and will put more companies into the hands of the Department of Industry than Mr Benn would dare to tackle himself’.