Assets as hedges against the inflation rate

Abstract: This paper investigates, using Swedish data from 1996 to 2016, the possibilities to use different investment assets to hedge against the expected and unexpected inflation rates. With the use of time series regressions, we find that treasury bills have the potential to be good hedges against the expected inflation rate, and that real estate could be a good hedge against the unexpected inflation rate. However, Swedish government bonds and different stock segments, based on industry type or market capitalization do not show signs to have good hedging possibilities.