The Safe Assets Shortage Conundrum

Journal of Economic Perspectives - Tập 31 Số 3 - Trang 29-46 - 2017
Ricardo J. Caballero1,2, Emmanuel Farhi3, Pierre‐Olivier Gourinchas4
1MIT
2Ricardo J. Caballero is Ford International Professor of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts. Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts.
3Emmanuel Farhi is Professor of Economics, Harvard University, Cambridge, Massachusetts. Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts.
4Pierre-Olivier Gourinchas is the S.K. and Angela Chan Professor of Economics, University of California, Berkeley, California. Research Associate, National Bureau of Economic Research, Cambridge, Massachusetts.

Tóm tắt

A safe asset is a simple debt instrument that is expected to preserve its value during adverse systemic events. The supply of safe assets, private and public, has historically been concentrated in a small number of advanced economies, most prominently the United States. Over the last few decades, with minor cyclical interruptions, the supply of safe assets has not kept up with global demand. The reason is straightforward: the collective growth rate of the advanced economies that produce safe assets has been lower than the world's growth rate, which has been driven disproportionately by the high growth rate of high-saving emerging economies such as China. The signature of this growing shortage is a steady increase in the price of safe assets; equivalently, global safe interest rates must decline, as has been the case since the 1980s. The early literature, brought to light by Ben Bernanke's famous “savings glut” speech of 2005, focused on a general shortage of assets without isolating its safe asset component. The distinction, however, has become increasingly important over time, particularly in the aftermath of the subprime mortgage crisis and its sequels. We begin by describing the main facts and macroeconomic implications of safe asset shortages. Faced with such a structural conundrum, what are the likely short- to medium-term escape valves? We analyze four of them, each with its own macroeconomic and financial trade-offs.

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Tài liệu tham khảo

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Thông tin xuất bản

Journal of Economic Perspectives

Tập 31 Số 3

29-46

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