Abstract

Investor demand for bonds is very high. This column argues that this is surprising because under almost any likely inflation scenario, including central banks merely hitting their target inflation rates, bondholders suffer large losses. The beneficiaries are sovereign and corporate borrowers; the losers are pension funds, insurance companies and some foreign exchange reserve funds. Meanwhile, the systemic risk from a bond crisis is increasing.

Authors

Balazs Csullag, Jon Danielsson, Robert Macrae

Year

2016

Journal

VoxEU. org.

Keywords

Economics, Finance, and FinTech

Leave a Reply