| It has long been recognized that high inflation can distort measures of interest, since a portion is required simply to counteract the real holding losses that occur for financial instruments that are not indexed for inflation. By the 1970s, when inflation was an important problem throughout much of the world, the treatment of interest under high inflation was considered an important issue for national accounts. However, contrary guidance is given by Annex B to chapter XIX of the 1993 SNA and chapter 7 of Inflation Accounting - A manual on National Accounting under Conditions of High Inflation (Organisation for Economic Co-operation and Development, 1996). It is therefore recommended that the search for a single universally accepted treatment of interest under high inflation remains on the research agenda. |
