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Indexation (Noun)

Meaning

A system of economic regulation: wages and interest are tied to the cost-of-living index in order to reduce the effects of inflation.

Classification

Nouns denoting acts or actions.

Examples

  • The government implemented a system of indexation to ensure that the purchasing power of wages and pensions was not eroded by inflation.
  • Indexation of interest rates to the cost-of-living index helped to maintain the real value of savings over time.
  • The central bank's policy of indexation meant that the interest rate on loans was adjusted regularly to reflect changes in the inflation rate.
  • The new law introduced a system of indexation for wages, which would automatically increase pay by the rate of inflation each year.
  • By linking tax thresholds to the cost-of-living index through indexation, the government aimed to prevent fiscal drag and reduce the burden of taxation on low-income households.

Hypernyms

  • Regulating

Related Words

  • Index (verb)
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