, Volume 53, Issue 2, pp 94–100 | Cite as

The Supply of Safe Assets and Fiscal Policy

  • Ludger Schuknecht
Sovereign Debt


Beyond fleeting references, there is surprisingly little analysis about the interrelationship between fiscal policy and safe assets. This study analyses this interrelationship and argues that, at a certain point, more public debt will not “buy” more safety: countries face a kind of “safe assets Laffer curve”, with a maximum amount of safe assets at some level of indebtedness. The position and stability of this curve depend on a number of national and international factors, including international risk appetite and the quantitative easing policies implemented by central banks. The study also finds evidence of declining safe assets, as reflected in government debt ratings.


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Copyright information

© ZBW and Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Federal Ministry of FinanceBerlinGermany

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