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The Secular Decrease in UK Safe Asset Market Power

Author

Listed:
  • Jason Choi
  • Duong Dang
  • Rishabh Kirpalani
  • Diego J. Perez

Abstract

We document the decline in market power of the United Kingdom in safe assets and quantify the resulting losses. We estimate an increasing elasticity of demand for UK public debt during the latter half of the twentieth century. This is in sharp contrast to the United States, which displays the opposite pattern with decreasing elasticities of demand during this time. We argue that the decline in market power of the United Kingdom in safe assets resulted in a sizable decline in seigniorage revenues.

Suggested Citation

  • Jason Choi & Duong Dang & Rishabh Kirpalani & Diego J. Perez, 2023. "The Secular Decrease in UK Safe Asset Market Power," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 120-124, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:120-24
    DOI: 10.1257/pandp.20231002
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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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