When a government decides to index wages of government employees to inflation it is to transfer the risk of inflation away from government workers onto the government. Such a policy is to attempt to reduce inflationary expectation and in turn inflation when it is rising rapidly. Research by economists is ambivalent on the success of such policies. Some have deemed it a success including Friedman (1974), Gray (1976), and Fischer (1977). Others have considered it less successful as they observed that indexation breeds inflation inertia (a reduction in the government and the central bank’s effort in fighting inflation leading to inflation rate remaining higher than targeted). This perspective is supported by Bonomo and Garcia (1994).