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American Economic Review Vol. 102 No. 3 2012

The Safe-Asset Share

Gary Gorton1; Stefan Lewellen2; Andrew Metrick3

1 Yale School of Management, 135 Prospect St., P.O. Box 208200, New Haven, CT 06520-8200 and NBER. · 2 Yale School of Management, 135 Prospect St., P.O. Box 208200, New Haven, CT 06520-8200. · 3 Yale School of Management, 135 Prospect St., P.O. Box 208200, New Haven, CT and 06520-8200 and NBER.

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.

DOI
10.1257/aer.102.3.101
Volume
102
Issue
3
Pages
101-106
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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