The contractual linking of longer-term (at medium and long term) monetary claims to a price index for the purpose of value protection. This is because when money is used as a means of transferring credit, the creditor incurs losses in the event of a deterioration in the value of money. – The legal system generally prohibits such contracts because they lead to a split of functions of the legal tender. It would still be used as a unit of account and an intermediate means of exchange, but no longer as a store of value. – In order to protect against impairment, however, the main means left is to use sliding-scale interests clauses. Here, the amount of interest to be paid can and may be linked to the inflation rate. – See investment substitution, bond, index-linked, issue, indexed, EuroNotes, futures, monetary stability, gold price, haven, safer, index funds, menu costs, swaps, inflation-indexed.
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