Economists compare today’s market to the one that emerged during Cold War era
Current geopolitical tensions could create persistent demand for offshore dollar-denominated assets, research by the US National Bureau of Economic Research finds.
The authors – Antonio Coppola, Arvind Krishnamurthy and Chenzi Xu – note that in November 2024 China issued $2 billion of US dollar-denominated bonds that are settled and traded in Dubai and Hong Kong. The issuance received bids of more than $40 billion, driving yields as low as 24 basis points below those for US Treasuries.
The authors
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