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The Aggregate Demand for Treasury Debt

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  • Annette Vissing-Jorgensen

    (Kellogg School of Management, Northwestern University)

  • Arvind Krishnamurthy

    (Kellogg School of Management, Northwestern University)

Abstract

holders also have downward sloping demand curves. Groups for whom the liquidity of Treasuries is likely to be more important have steeper demand curves. The results have bearing for important questions in finance and macroeconomics. We discuss implications for the behavior of corporate bond spreads, interest rate swap spreads, the riskless interest rate, and the value of aggregate liquidity. We also discuss the implications of our results for the financing of the US deficit, Ricardian equivalence, and the effects of foreign central bank demand on Treasury yields.

Suggested Citation

  • Annette Vissing-Jorgensen & Arvind Krishnamurthy, 2008. "The Aggregate Demand for Treasury Debt," 2008 Meeting Papers 713, Society for Economic Dynamics.
    • Handle: RePEc:red:sed008:713
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