We study the inflation hedging ability of individual stocks. While the poor inflation hedging ability of the aggregate … inflation. Stocks with good inflation-hedging abilities since 1990 have had higher returns, on average, than stocks with low … inflation betas and tend to be drawn from the Oil and Gas and Technology sectors. However, we show that there is substantial …

hedging approach can eliminate nearly 90 percent of the tracking error of more conventional inflation hedging strategies. We … also find that long-short positions in equities play a dominant role in the effective hedging of inflation risk over …We propose a new approach to constructing inflation tracking portfolios. The key to this approach is the insight that …

-arbitrage model, the short rate follows a version of the Taylor (1993) rule where the coefficients on the output gap and inflation … time. The overall response of the yield curve to output gap components is relatively small. In contrast, the inflation …-term bonds are sensitive to inflation policy shifts with increases in inflation loadings leading to higher short rates and …

In our incomplete markets economy financial frictions affect the optimal inflation target. Households choose portfolios … is driven by the economic growth rate, which in turn depends on individual portfolio decisions. Higher inflation due to … investment. The optimal inflation target boosts growth and welfare and is higher for emerging market economies …