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indexation |
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indexationComparison of price levels over time. In fiscal policy, indexation is used as a means of offsetting the effect of inflation or deflation on social security payments and taxes by measuring the real value of money from a fixed point of reference, usually a price index. Without indexing, recipients of social security benefits, for example, would suffer during times of inflation if their benefits remained at a fixed rate. Indexation is used in some countries to offset “bracket creep,” which occurs in any progressive tax system when inflation pushes taxpayers into higher tax brackets. Indexation may also refer to the linking of wage rates and financial instruments to a price index. indexation, index-linking the act of making wages, interest rates, etc., index-linked Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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