Authors
Citation
T. Cowen, SHOULD CENTRAL BANKS TARGET CPI FUTURES, Journal of money, credit and banking, 29(3), 1997, pp. 275-285
Citations number
27
Categorie Soggetti
Business Finance
Journal title
ISSN journal
00222879
Volume
29
Issue
3
Year of publication
1997
Pages
275 - 285
Database
ISI
SICI code
0022-2879(1997)29:3<275:SCBTCF>2.0.ZU;2-N
Abstract
I consider recent proposals that the government should attempt to stab
ilize the nominal value of a CPI futures contract. Under a variety of
conditions arbitrageurs will break the peg and bankrupt the central ba
nk, the central bank ends up in a gaming problem with private traders,
or the regime collapses into discretion.