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We consider an arbitrage strategy which exactly replicates the cash flow of a sovereign nominal bond using inflation … swaps and inflation-linked bonds. The strategy reveals a violation of the law of one price in the G7 countries which is …
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The French government currently honors a very unusual debt contract: an annuity that was issued in 1738 and currently yields 1.20 Euro per year. I tell the story of this unique debt, which serves as an anecdotal but symbolic summary of French public finances since the 18th century. -- life...
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