000			02778cam a22004097a 4500
001			w30720
003			NBER
005			20221223084036.0
006			m o d
007			cr cnu||||||||
008			221223s2022 mau fo 000 0 eng d
040			_aMaCbNBER _beng _cMaCbNBER
100	1		_aChoi, Jason.
245	1	4	_aThe Macroeconomic Implications of US Market Power in Safe Assets / _cJason Choi, Rishabh Kirpalani, Diego J. Perez.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2022.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w30720
500			_aDecember 2022.
520	3		_aThe US government is the dominant supplier of global safe assets and faces a downward-sloping demand for its debt. In this paper, we ask if the US exercises its market power when issuing debt and study its macroeconomic consequences. We develop a model of the global economy in which US public debt generates a non-pecuniary value for its holders, analyze the equilibrium in which the US government is the monopoly provider of this safe asset, and contrast this case with the one in which the US government acts as a price taker. We use variation in estimated demand elasticities for US debt during high- and low-volatility regimes to empirically distinguish between these two models and find that the data reject the price-taking behavior in favor of the monopoly one. We then quantify the distortions due to market power and find that it generates a significant underprovision of safe assets, a sizable markup in the convenience yield, and large welfare benefits for the US to the detriment of the rest of the world. Finally, we study the implications of increasing competition in safe assets from other sovereigns and private institutions.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aMacroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook _2jelc
650		7	_aMacroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook _2jelc
084			_aE6 _2jelc
690		7	_aInternational Finance _2jelc
650		7	_aInternational Finance _2jelc
084			_aF3 _2jelc
700	1		_aKirpalani, Rishabh.
700	1		_aPerez, Diego J.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w30720.
856	4	0	_uhttps://www.nber.org/papers/w30720
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w30720
942			_2ddc _cW-PAPER
999			_c390449 _d349011