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Olivier Blanchard

What Olivier Blanchard thinks about investing

@olivier-blanchard · 24 positions · 1 change of mind

Economist; former chief economist of the International Monetary Fund.

Everything they publish, on ppll ↗

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2 dated positions, 2022, in their own words. Our reading of what Olivier Blanchard has said — not written or endorsed by them.

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  1. Our readingSovereign debt markets can suffer sudden stops in investor demand even without material changes in economic fundamentals.

    Their wordsSovereign debt markets (and many other markets as well) are subject to sudden stops in which investors either drop out or ask for large spreads even in the absence of large changes in fundamentals.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu 6th of 22 in this piece

    Interesting

  3. Our readingA central bank can eliminate a self-fulfilling ('sunspot') debt crisis simply by credibly committing to buy as many bonds as needed at the low interest rate.

    Their wordsThis is precisely the role the central bank can play. By announcing that it stands ready to buy the bonds that investors want to sell at the price associated with the low interest rate, and credibly indicating that it has deep enough pockets to buy whatever is needed, it can eliminate the bad equilibrium.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu 12th of 22 in this piece

    interest rates

    Interesting