Think: Yahoo, circa 1995.
Indexation runs when businesses, organizations, and governments use indices to match prices, wages, and assets to inflation.
Indexation is used by governments to try to curb inflationary damage on the economy.
For instance, a government might set their minimum wage rate to increase along with inflation, keeping the real wage constant as nominal wages rise. Remember: real wages reflect true buying power in the market. Nominal wages and prices change with inflation, so you can’t take them at face value, since a big pay increase doesn’t really mean anything if all prices around you also rose.
Indexation might also be used to ensure that retirement plans keep pace with inflation, as well as assets on the market. In any case, where the nominal price of something is floating along the surface of inflation, indexation is probably floating their boat.