Hanno Lustig and Romain Wacziarg on economic policy and political economy.
US corporations are currently generating unprecedented amounts of cash for their investors. But even if you compare free cash flows to enterprise value, this time would have to be different in order for investors to earn a typical return on equities. Holding t…
At these stock prices, we need either record valuations to last another decade or earnings growth we have seen only twice since 1880 for US equities to beat TIPS over the next decade. Just to harvest a small equity premium.
The French government does not just have a spending problem.
Why France now pays more than Italy to borrow.
What to expect when you’re building data centers.
Government debt is being marked to market. We're now relying on price-sensitive investors to absorb sovereign bond issuance going forward.
The spread between the benchmark 10-year French (OAT) government bond and the German Bund is currently trading at 94 bps.
Treasury investors demand a much higher risk premium for bearing interest rate risk than 5 years ago. That’s bad news for US taxpayers, who will probably be asked to bear more of it going forward.
What Target-2 balances and the ECB's income pooling reveal about the French debt-cancellation debate.
Bond investors are no longer willing to pay a premium for the safety of Treasuries.
Japan is running a sovereign wealth fund funded with money borrowed at floating rates.
The answer used to be "Not much."
The Fed's instrument panel has no gauge for fiscal risk.
Back in 1993 John Taylor, a professor at Stanford Economics, wrote down a rule to describe how central bankers in the US set the policy rate, the Fed Funds rate.
Europe and America chose different points on the efficiency-equity trade-off. That used to be a matter of preferences. It isn't anymore.
One of the best political interviews I’ve seen in years is François Bayrou’s interview, the French PM, on the French evening news by Gilles Bouleau on Wednesday, 27 August 2025 8 p.m.
When the FOMC met on the morning of June 9, 2020, in the midst of the pandemic, the question on the table was whether yield curve control (YCC) would be an appropriate tool to deploy in the pandemic. One FOMC member said "there are no bazookas left in our unco…
Joint work with Roberto Gomez-Cram, Howard Kung, and David Zeke.
Really interesting and provocative column in the FT yesterday on passive investors by Stuart Kirk.
I moved to the Bay Area in 1997.
When you think about asset management, managing other people’s money, the first thing you have to worry about is the alignment of incentives.
The U.S.
Google Inc.
If you buy into this Pflueger/Yared perspective, then the price of exorbitant privilege is outspending your military adversaries. And the US has outspent other advanced economies by a large margin when you express defense spending as a fraction of GDP. I took…
On September 25, 2025, an amicus brief was filed at the Supreme Court in Trump v.
How do Robinhood investors fare?
With Howard Kung (LBS) and James Paron (Stanford GSB).
The Bank of Japan’s low-rate policies have kept Japan’s debt sustainable for a decade. Someone had to fund that. It wasn’t foreigners.
Running a SWF with borrowed money.
Last year, on August 19 2025, the day before Powell was to give his annual Jackson Hole speech, the White House pressured Chairman Powell to lower rates.