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