Using novel data on sectoral safe asset positions in 21 advanced economies since 1980, we document the central role of the foreign sector in the market for safety and its macroeconomic implications.
(joint with Madalen Castells-Jauregui, Björn Richter, and Victoria Vanasco)
Using novel data on sectoral safe asset positions in 21 advanced economies since 1980, we document the central role of the foreign sector in the market for safety and its macroeconomic implications.
We show that safe asset holdings have expanded significantly relative to GDP, driven by rising net holdings of the foreign sector and accommodated by increased issuance from the financial and public sectors.
Furthermore, fluctuations in safe assets are almost exclusively driven by the foreign and financial sectors, with close links between the two.
Finally, increases in foreign demand for safety - or its counterpart, the supply by financials - are associated with domestic credit expansions and weaker medium-term output growth, both in raw data and when using FX reserve accumulation in Asian economies as instrument.
Registration for bilateral
If you would like to meet the guest speaker for a bilateral after the seminar, please register by filling in the registration form.
See also
- More information
Contact the secretariat if you wish to attend this online seminar.
