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SUMMARY:Manufacturing Risk-free Government Debt
DTSTART:20201002T160000
DTEND:20201002T173000
DTSTAMP:20260531T105138Z
UID:c0faec3c28012755f212eb8b7706162cab46852187c10f0658bb71ae
CATEGORIES:Conferences - Seminars
DESCRIPTION:Hanno LUSTIG\, Stanford\nWhen debt is priced fairly\, governme
 nts face a trade-off between insuring bondholders and taxpayers. If the go
 vernment decides to fully insure bondholders by manufacturing risk-free de
 bt\, then it cannot insure taxpayers against permanent macro-economic shoc
 ks over long horizons.\nInstead\, taxpayers will pay more in taxes in bad 
 times. Conversely\, if the government insures taxpayers against adverse ma
 cro shocks\, then the debt becomes at least as risky as un-levered equity.
  Only when government debt earns convenience yields\, may governments be a
 ble to insure both bondholders and taxpayers\, and then only if the conven
 ience yields are sufficiently counter-cyclical.\nPaper: \nhttps://papers.
 ssrn.com/sol3/papers.cfm?abstract_id=3646430\n 
LOCATION:Zoom
STATUS:CONFIRMED
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