In statistics relating to national economies, the indexation of contracts also called “index linking” and “contract escalation” is a procedure when a contract includes a periodic adjustment to the prices paid for the contract provisions based on the level of a nominated price index. The purpose of indexation is to readjust contracts to account for inflation. In the United States, the consumer price index (CPI), producer price index (PPI), and, in the U.S., Employment Cost Index (ECI) are the most frequently used indexes.
- ^“INDEXATION OF CONTRACTS”. Glossary of statistical terms. OECD. July 8, 2005. Retrieved 2009-05-07.
- ^“BLS Information”. Glossary. U.S. Bureau of Labor Statistics Division of Information Services. February 28, 2008. Retrieved 2009-05-05.
- ^“Contract Escalation”. BLS Information. U.S. Bureau of Labor Statistics. July 27, 2006. Retrieved 2009-05-07.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.