The Secular Decrease in UK Safe Asset Market Power

Jason Choi, Duong Dang, Rishabh Kirpalani and Diego J. Perez

AEA Papers and Proceedings, 2023, vol. 113, 120-24

Abstract: We document the decline in market power of the United Kingdom in safe assets and quantify the resulting losses. We estimate an increasing elasticity of demand for UK public debt during the latter half of the twentieth century. This is in sharp contrast to the United States, which displays the opposite pattern with decreasing elasticities of demand during this time. We argue that the decline in market power of the United Kingdom in safe assets resulted in a sizable decline in seigniorage revenues.

JEL-codes: E23 E43 F34 G12 N24 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/pandp.20231002

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