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The Safe-Asset Share

17 Pages Posted: 21 Jan 2012 Last revised: 24 Jan 2012

Gary B. Gorton

Yale School of Management; National Bureau of Economic Research (NBER)

Stefan Lewellen

London Business School

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER)

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Date Written: January 2012

Abstract

We document that the percentage of all U.S. assets that are "safe" has remained stable at about 33 percent since 1952. This stable ratio is a rare example of calm in a rapidly changing financial world. Over the same time period, the ratio of U.S. assets to GDP has increased by a factor of 2.5, and the main supplier of safe financial debt has shifted from commercial banks to the "shadow banking system." We analyze this pattern of stylized facts and offer some tentative conclusions about the composition of the safe-asset share and its role within the overall economy.

Suggested Citation

Gorton, Gary B. and Lewellen, Stefan and Metrick, Andrew, The Safe-Asset Share (January 2012). NBER Working Paper No. w17777. Available at SSRN: https://ssrn.com/abstract=1989346

Gary B. Gorton (Contact Author)

Yale School of Management ( email )

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HOME PAGE: http://mba.yale.edu/faculty/profiles/gorton.shtml

National Bureau of Economic Research (NBER)

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Stefan M. Lewellen

London Business School ( email )

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Regent's Park
London, London NW1 4SA
United Kingdom

Andrew Metrick

Yale School of Management ( email )

165 Whitney Avenue
New Haven, CT 06511
United States
(203)-432-3069 (Phone)

HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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