Arbeitspapier
The safety of government debt
We examine the safety of government bonds in the presence of Knightian uncertainty amongst financial market participants. In our model, the information insensitivity of government bonds is driven by strategic complementarities across counterparties and the structure of trading relationships. We identify the frontier between safe and unsafe assets and show how the growth rate of the economy and its fiscal capacity interact with the degree of ambiguity amongst investors to determine the safe-asset equilibrium. We use our framework to illustrate a fiscal variation on the Triffin dilemma, in which the role of a country as sole provider of international liquidity is questioned as its size in the world economy - and hence its fiscal capacity - diminishes.
- Sprache
-
Englisch
- Erschienen in
-
Series: Bank of Canada Working Paper ; No. 2013-34
- Klassifikation
-
Wirtschaft
Financial Markets and the Macroeconomy
Criteria for Decision-Making under Risk and Uncertainty
International Economic Order and Integration
Open Economy Macroeconomics
International Financial Markets
- Thema
-
Economic models
Financial stability
International financial markets
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Anand, Kartik
Gai, Prasanna
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Canada
- (wo)
-
Ottawa
- (wann)
-
2013
- DOI
-
doi:10.34989/swp-2013-34
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Anand, Kartik
- Gai, Prasanna
- Bank of Canada
Entstanden
- 2013
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