The Safe-Asset Share
Gary Gorton, Stefan Lewellen, Andrew Metrick
American Economic Review · 2012 · Volume 102 · Issue 3
Abstract
We document that the percentage of all U.S. assets that are "safe" has remained stable at about 33 percent since 1952. This stable ratio is a rare example of calm in a rapidly changing financial world. Over the same time period, the ratio of U.S. assets to GDP has increased by a factor of 2.5, and the main supplier of safe financial debt has shifted from commercial banks to the "shadow banking system." We analyze this pattern of stylized facts and offer some tentative conclusions about the composition of the safe-asset share and its role within the overall economy.
Keywords
Financial Markets and the Macroeconomy, Monetary Policy, Banks, Other Depository Institutions, Micro Finance Institutions, Mortgages, Financial Institutions and Services: Government Policy and Regulation
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