Interest rates are low but are annuities expensive? |
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| Authors: | Philip Booth Geoffrey E Wood |
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| Institution: | Philip Booth is Professor of Real Estate Finance and Investment at City University Business School and Geoffrey Wood is Professor of Economics at City University Business School. |
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| Abstract: | It is often claimed that annuities are now 'expensive'. That claim is at least partly based on money illusion. Careful analysis shows that the current prices of annuities are largely the result of a decline in inflation expectations which has brought about a change in the income stream for annuities. |
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