Investopedia

Indexation

Dictionary Says

Definition of 'Indexation'

Linking adjustments made to the value of a good, service or other metric, to a predetermined index. Indexation requires the identification of a price index and whether a linking the value to the price index, will accomplish the organization's goals. Indexation is most commonly used with wages in a high inflation environment.

Investopedia Says

Investopedia explains 'Indexation'

Businesses may use indexation to match an employee's salary to the inflation rate, meaning that an increase in the inflation rate over a period of time, will lead to an increase in salary. This particular type of indexation is called a cost of living increase (COLA). Indexation is a pre-specified process, meaning that all parties involved are typically aware of how the link works.

Articles Of Interest

  1. Maximize Your Social Security Benefits

    The plan's cost of living adjustments can provide protection against inflation.
  2. What You Should Know About Inflation

    Find out how this figure relates to your investment portfolio.
  3. An Introduction To Stock Market Indexes

    Be in the know - learn about the five most talked about indexes and what makes them all different.
  4. How To Save More For Your Retirement

    The Economic Growth and Tax Relief Reconciliation Act of 2001 made it easier to prepare for the future. Will you be ready?
  5. The Lowdown On Index Funds

    If you can't beat the market, why not join it? Read on to go over your options.
  6. Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  7. Predict Inflation With The Producer Price Index

    Find out how the PPI can be used to gauge the overall health of the economy.
  8. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  9. How The 2014 Obama Budget Could Affect Your Finances

    Depending on which estimate you believe, Obama's proposed budget would raise the tax bill of a household with a yearly income of $50,000 to $75,000 between $63 and $100 per year. However, that’s ...
  10. Austerity: When The Government Tightens Its Belt

    When a government tightens its belt in tough economic times the entire nation feels the squeeze.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center