Report
Fundamentals and money supply: Understanding how it works
We start with a simple theoretical model of intertemporal consumption choice given in the Appendix to describe the relationship between the value of a risky asset and the money supply. Unsurprisingly, we find that the higher the money supply, the lower the risk premium that should be used to calculate the fundamental value of the risky asset. This provides a basis for the negative correlation observed between risk premium and money supply .
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.