A Response to “Unpleasant Asset Pricing Arithmetic” — Brian Romanchuk

Summary:
Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh and Mindy Xiaolan have a working paper "What Determines the Government’s Funding Costs when r=g?: Unpleasant Fiscal Asset Pricing Arithmetic." They argue that the "fiscal cost" of deficits is not expected to be driven by the gap between the "risk free rate" and GDP growth (the famous r-g equation). Their target is something or other Olivier Blanchard wrote. In a completely non-surprising development, I am not happy with their logic….Bond EconomicsA Response to "Unpleasant Asset Pricing Arithmetic"Brian Romanchuk

Topics:
Mike Norman considers the following as important:

This could be interesting, too:

Lars Pålsson Syll writes Monte Carlo simulation explained (student stuff)

Mike Norman writes Corporate buybacks

Mike Norman writes Month end settlements

Angry Bear writes Biden finalizes rule opening up Obamacare to DACA recipients