David Beckworth on the Safe Asset Theory of Inflation, Comparing Central Bank Frameworks, and a Year of Macro Musings in Review
Macro Musings with David Beckworth
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How to Interpret Low Inflation?
ien: There hasn't been a lot of explicit work trying to tie the low inflation to the safe acets. One theory is that an elevated demand for safe assets drives down safe asset yields. Another way you could think about this is that the increased demand safe assets will increase future sinorage flows, ien says. I tell a real money demand shock story in my paper, ien writes.
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