Safe Assets
dc.contributor.author | Brunnermeier, MK | |
dc.contributor.author | Merkel, SA | |
dc.contributor.author | Sannikov, Y | |
dc.date.accessioned | 2024-01-29T11:22:01Z | |
dc.date.issued | 2024 | |
dc.date.updated | 2024-01-28T20:52:45Z | |
dc.description.abstract | The price of a safe asset reflects not only the expected discounted future cash flows but also future service flows, since retrading allows partial insurance of id iosyncratic risk in an incomplete markets setting. This lowers the issuers’ interest burden. As idiosyncratic risk rises during recessions, so does the value of the ser vice flows bestowing the safe asset with a negative β. The resulting exorbitant privilege resolves government debt valuation puzzles and allows the government to run a permanent (primary) deficit without ever paying back its debt, but the government faces a “Debt Laffer Curve”. | en_GB |
dc.identifier.citation | Awaiting citation | en_GB |
dc.identifier.doi | 10.1086/730547 | |
dc.identifier.uri | http://hdl.handle.net/10871/135183 | |
dc.language.iso | en | en_GB |
dc.publisher | The University of Chicago Press | en_GB |
dc.rights.embargoreason | Under temporary indefinite embargo pending publication by The University of Chicago Press. 12 month embargo to be applied on publication | en_GB |
dc.rights | © 2024. This version is made available under the CC-BY-NC 4.0 license: https://creativecommons.org/licenses/by-nc/4.0/ | en_GB |
dc.subject | Safe Asset | en_GB |
dc.subject | Exorbitant Privilege | en_GB |
dc.subject | Government Debt | en_GB |
dc.subject | Debt Laffer Curve | en_GB |
dc.subject | Ponzi Scheme | en_GB |
dc.subject | Fiscal Capacity | en_GB |
dc.subject | r vs. g | en_GB |
dc.title | Safe Assets | en_GB |
dc.type | Article | en_GB |
dc.date.available | 2024-01-29T11:22:01Z | |
dc.identifier.issn | 1537-534X | |
dc.description | This is the author accepted manuscript. | en_GB |
dc.identifier.eissn | 1537-534X | |
dc.identifier.journal | Journal of Political Economy | en_GB |
dc.relation.ispartof | Journal of Political Economy | |
dc.rights.uri | https://creativecommons.org/licenses/by-nc/4.0/ | en_GB |
dcterms.dateAccepted | 2023-11-10 | |
dcterms.dateSubmitted | 2022-11-23 | |
rioxxterms.version | AM | en_GB |
rioxxterms.licenseref.startdate | 2023-11-10 | |
rioxxterms.type | Journal Article/Review | en_GB |
refterms.dateFCD | 2024-01-28T20:52:47Z | |
refterms.versionFCD | AM | |
refterms.panel | C | en_GB |
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Except where otherwise noted, this item's licence is described as © 2024. This version is made available under the CC-BY-NC 4.0 license: https://creativecommons.org/licenses/by-nc/4.0/