Hanno Lustig is a professor of finance at Stanford University, and a senior fellow at the Stanford Institute for Economic Policy Research. Hanno joins David on Macro Musings to discuss his work on dollar safety, safe assets, convenience yields, and more. More specifically, Hanno and David discuss the dollar dominance in global financial markets, how the US’s status as the world’s safe asset provider reinforces its exorbitant privilege in money markets, whether the countercyclical demand for safe assets can help explain why US inflation has been so low this past decade, how years of low interest rate policy might have contributed to the growing wealth gap, and much more.
Transcript for the episode can be found here.
Hanno’s Twitter: @HannoLustig
Hanno’s Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/hanno-lustig
Related Links:
*Dollar Safety and the Global Financial Cycle* by Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lustig
https://www.gsb.stanford.edu/faculty-research/working-papers/dollar-safety-global-financial-cycle
*Mind the Gap in Sovereign Debt Markets: The U.S. Treasury basis and the Dollar Risk Factor* by Arvind Krishnamurthy and Hanno Lustig
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3443231
*Manufacturing Risk-Free Government Debt* by Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, and Mindy Z. Xiaolan
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3646430
*US Government Debt Valuation Puzzle* by Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, and Mindy Z. Xiaolan
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3333517
*The Fiscal Theory of Price Level with a Bubble* by Markus K. Brunnermeier, Sebastian A. Merkel and Yuliy Sannikov
https://www.nber.org/papers/w27116
*Debt As Safe Asset: Mining the Bubble* by Markus K. Brunnermeier, Sebastian Merkel, and Yuliy Sannikov
https://scholar.princeton.edu/markus/publications/debt-safe-asset-mining-bubble
*The Safety Trap* by Ricardo J. Caballero and Emmanuel Farhi
https://www.nber.org/papers/w19927
*Financial and Total Wealth Inequality with Declining Interest Rates* by Daniel Greenwald, Matteo Leombroni, Hanno Lustig, and Stijn Van Nieuwerburgh
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3789220
*The Saving Glut of the Rich* by Atif Mian, Ludwig Straub, and Amir Sufi
https://scholar.harvard.edu/straub/publications/saving-glut-rich-and-rise-household-debt
David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth
