TheMacroeconomicsofAssetShortages.pptVIP

The Macroeconomics of Asset Shortages Ricardo J. Caballero MIT and NBER /caball/www Fall 2007 Overview A conjecture… Excess demand for (financial assets) store of value and collateral by households, corporations, governments, insurance companies, financial intermediaries No direct evidence…(both supply and demand are very hard to measure) But the implications of this single ingredient are consistent with many of the main macroeconomic events of the last decade and more (Occam’s razor )… Dark matter… Overview Equilibrium response of asset prices and valuations have macroeconomic implications