Month: January 2019

  • Safe Assets, Collateral, and Portfolio Preferences

    Matthew Klein and Mayank Seksaria had an interesting Twitter conversation yesterday in response to a Stephanie Kelton tweet. Read it here. Here’s my understanding of the financial mechanisms they’re talking about. Government deficit spending deposits fixed-price securities (“money,” checking and money-market holdings) ab nihilo onto private sector balance sheets. These are perfectly “safe assets” in the…