Indexed units of account
Subtitle: theory and assessment of historical experience
By: Robert J. Shiller.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 6356; Working paper series (National Bureau of Economic Research) -- working paper no. 6356.
Publisher: National Bureau of Economic Research
Published: 1998
Place of publication: Cambridge, MA
Language: eng
Number of pages: 40
Subjects: Price indexes -- Econometric models.; Prices -- Chile -- Econometric models.; Money -- Chile -- Econometric models.
Description: An indexed unit of account is a money analogue, used to express prices; the unit's purchasing power is defined by an index. Indexed units of account are not true money in that they are not used as a medium of exchange. The first successful indexed unit of account Unidad de Fomento (UF) has been used in Chile since 1967, and has been copied in Colombia Ecuador, Mexico, and Uruguay. The reasons for creating such units are discussed from the standpoint of monetary theory. The experience with such units in Chile is discussed. It is argued that important practical problems in implementing indexation were solved by creating such" indexed units of account. The existing indexed units of accounts may not be ideal for all purposes, however, and alternative definitions of the units, relating the units to measures of income, may also be advantageous. The indexed units of account might someday be monetized, i.e., institutions such as debit cards may be devised to allow the units to be used for all transactions, so that the role of conventional money might be reduced to clearing-house functions only.
Notes: "January 1998."

JEL no. E42.

Includes bibliographical references (p. 38-40).

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