American Economic Review: Vol. 102 No. 3 (May 2012)


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The Safe-Asset Share

Article Citation

Gorton, Gary, Stefan Lewellen, and Andrew Metrick. 2012. "The Safe-Asset Share." American Economic Review, 102(3): 101-06.

DOI: 10.1257/aer.102.3.101


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.

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Gorton, Gary (Yale U)
Lewellen, Stefan (Yale U)
Metrick, Andrew (Yale U)

JEL Classifications

E44: Financial Markets and the Macroeconomy
E52: Monetary Policy
G21: Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
G28: Financial Institutions and Services: Government Policy and Regulation

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