Editing Indexation (section)

==Debt==
The indexation of government debt to inflation is related to transferring the inflation risk from depositors to the government in an attempt to reduce inflation.  Some governments have ultimately subjected their short-term debt instruments to deindexation so their central bank could regain control of short-term interest rates from a monetary policy standpoint and be in a better position to fight inflation.  Another objective of indexation, for certain governments with already low inflation rate, is to reduce their borrowing cost by paying lower interest rates to depositors in exchange for assuming inflation risk.  Both the UK and the US have issued inflation indexed government bonds to reduce their borrowing costs.  When governments such as the UK and the US issue both inflation indexed bonds and regular nominal bonds, it gives them precise information on inflation expectation by observing the difference in yields between the two types of bonds.  [[Robert Shiller]] has done extensive research on all mentioned aspects of government bond indexation.