tightening. We offer new evidence to confirm these findings, and then propose a theory based on the liquidity of U.S. government … liabilities held by the public. We hypothesize that QE, by increasing liquidity, offers greater flexibility for investors that … investments in illiquid loans to emerging markets. The effect of increasing the liquidity of U.S. government liabilities on …

in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …

lackluster, like Japan, have done surprisingly well in terms of GDP growth per working-age adult. Indeed, from 1998 to 2019 …, Japan has grown slightly faster than the U.S. in terms of per working-age adult: an accumulated 31.9% vs. 29.5%. Furthermore …

, and other major advanced economies have similar levels of credibility (albeit far from full credibility); however, Japan …