The Brookings Institution is committed to quality, independence, and impact.
We are supported by a diverse array of funders. In line with our values and policies, each Brookings publication represents the sole views of its author(s).

Research
BPEA | 1997 No. 11997, No. 1
THE INDEXATION OF payments makes excellent sense for all sorts of
long-term contracts. Future payments should not be expressed in currency
units, but instead tied to an index of consumer prices or an index
of wholesale prices, of wages, of incomes, or of components of income.
History shows that the real value of currency units has been so unstable
that it is better to use practically any one of these indexes to specify
future payments in contracts than to specify payments in terms of fixed
currency.