Ricardo Caballero: There Is No Bond Bubble

Ricardo Caballero says there is no bond bubble because people really really want safe nominal assets and there are not very many of them--so naturally their price is very high:

Economics: No, there is a shortage of safe assets: Ricardo Caballero our guest wrote on Aug 20th 2010, 15:37 GMT:

IT IS not a bubble. It simply reflects a massive shortage of (what are perceived to be) safe assets.

This shortage was present before the crisis, which is largely what led to...