Maggiori AND Schreger join the Macromusings podcast to talk about their GEOECONOMICS research
December 4th 2023
“Maggiori and Schreger join the Macromusings podcast to talk about their GEOECONOMICS research, joint with Chris Clayton. How and why governments use their countries' economic strength from existing financial and trade relationships to achieve geopolitical and economic goals.”
THE ECONOMIST: “New industrial policies will not help economic stability”
October 2nd 2023
“I think most trade and investment relationships between America and China are best left to private decisions,” says Matteo Maggiori of Stanford University. “But it would make sense to restrict trade and investment in some highly sensitive areas, such as port infrastructure and defence.” This would reduce, though not eliminate, the potential damage that China could do if it turned truly hostile to the West. Economists including Mr Maggiori are working on models to inform politicians about which sectors should be protected, and how.”
BANCO DE ESPANA: CEREMONY of BERNACER Prize
June 20th 2023
Matteo Maggiori was awarded the Bernacer Prize. The ceremony was held at the Banco de Espana and hosted by Governor Hernandez de Cos and ECB Vice President Luis De Guindos.
VP De Guindos remarks on Maggiori's research contributions
A panel with Maggiori and ECB Chief Economist Philip Lane: video
Financial Services Committee on “International Financial Institutions in an Era of Great Power Competition”
May 25th 2023
Jesse Schreger testifies before the House Financial Services Committee Subcommittee on National Security, Illicit Finance, and International Financial Institutions on the "International Financial Institutions in an Age of Great Power Rivalry."
REUTERS: “DEBT CEILING DEBACLE IS ULTIMATE WINNER’S CURSE”
May 23rd 2023
“A study by the Global Capital Allocation Project examined corporate bond holdings where issuer and buyer were in different countries, and found that the share denominated in U.S. dollars has grown since the financial crisis, from roughly 40% to over 60%. The euro share has slumped.”
Econofact Chats: “How Much of Your Investments Are in China?"
April 11th 2023
“Matteo's podcast with EconoFact on investment in China both onshore and offshore, home currency bias, and China's attempts to internationalize its currency. An overview of broad themes in international macroeconomics as well as GCAP research.”
the New york times: “Chinese companies are doing risky business in the caribbean
March 8th 2023
"China wasn’t a big presence there. As recently as 2002, only 1.7 percent of the outstanding equity issued in tax havens worldwide consisted of equity issued by Chinese shell companies in the Caymans, the researchers calculated.
By 2020, the team found, Chinese shell companies in the Caymans accounted for 52.5 percent of all outstanding equity issued in tax havens. Chinese companies’ issuance of equity in Bermuda accounted for an additional 3.4 percent and their issuance in other tax havens 0.5 percent.”
NBER DIGEST: “Chinese Firms Access Foreign Capital in International Tax Havens”
March 4th 2023
"In the past 20 years, Chinese companies have gone from negligible participation in securities issuance in tax havens to representing more than 60 percent of the equity outstanding by firms domiciled in these countries in 2020."
IL SOLE 24 ORE: “Cina, nuova stretta sulle quotazioni Ma è ancora corsa ai paradisi fiscali”
January 10th 2023
“I dati aggiornati di Global Capital Allocation Project con sede nelle università di Columbia e Stanford indicano infatti che gli interessi delle società cinesi sono di ostacolo agli sforzi dello stesso Governo centrale per regolamentare i paradisi fiscali globali. Almeno 1,4 trilioni di dollari di investimenti esteri in Cina sono stati in gran parte incanalati attraverso veicoli offshore istituiti da società cinesi nei paradisi fiscali.”
THE ECONOMIST: “The dollar could bring investors a nasty surprise”
January 12th 2023
“Analysis in 2020 by Matteo Maggiori, Brent Neiman and Jesse Schreger, three economists, showed that in Australia, Canada and New Zealand more than 90% of corporate bonds held by foreigners were denominated in outside currencies, typically dollars.”
bloomberg: “Tax Havens Obscured at Least $1.4 Trillion of Foreign Investment in China”
January 5th 2023
“US and European investors’ holdings of equities and bonds issued by offshore vehicles controlled by Chinese companies such as Alibaba Group Holding and Tencent Holdings reached $1.4 trillion at the end of 2020, according to new estimates from the Global Capital Allocation Project”
Business Insider: "China is making the yuan more international by opening up its bond market - but economists say the currency faces a big test"
August 21, 2022
"Over the last two decades, China has gradually allowed more traders and central banks to buy into its yuan-denominated bond market, according to an August paper published by the National Bureau of Economic Research."
BLOOMBERG: "FOREIGN BOND INVESTORS START SEEING CHINA LIKE DEVELOPED MARKET"
August 19, 2022
“The dynamics of reputation make Chinese debt a substitute for emerging market risky debt in the early stages of internationalization and more of a substitute for developed market safe debt in the later stages.”
Matteo Maggiori wins the Bernácer Prize
August 3, 2022
The Germán Bernácer Prize is given annually to a European economist under age 40 who has made outstanding contributions in macroeconomics and finance. The committee awarded the prize for “his influential research on international finance and macroeconomics, including asset pricing and exchange rate dynamics, and cited Matteo’s role as the co-founder and director of the Global Capital Allocation Project.
ECON FOCUS: “IS DOLLAR DOMINANCE IN DOUBT?”
June, 2022
“China has taken steps to internationalize the renminbi in recent years by opening its financial markets up to more foreign investors, but Maggiori says it still has a long way to go to match the openness of the U.S. market. In a recent working paper with Christopher Clayton of Yale University and Amanda Dos Santos and Jesse Schreger of Columbia University, Maggiori argued that China was slowly opening itself up to build a ‘reputation as a country capable of providing the global store of value.’ ‘The road toward the renminbi becoming an international currency is a difficult one that will take some time and face its inevitable setbacks,’ says Maggiori.”
THE ECONOMIST: “CHINA IS TRYING TO PROTECT ITS ECONOMY FROM WESTERN PRESSURE”
May 26, 2022
“Take its bond market. A new paper by four economists, Christopher Clayton, Amanda Dos Santos, Matteo Maggiori and Jesse Schreger, examines private investors’ holdings of yuan-denominated bonds. In recent years the vast majority of inflows into these assets have come from America, the euro zone and Japan.”
MATTEO MAGGIORI NAMED CARNEGIE FELLOW
April 26, 2022
“Each year the Andrew Carnegie Fellows Program recognizes a select group of extraordinary scholars and writers who receive philanthropic support for scholarship in the humanities and social sciences that addresses important and enduring issues confronting our society.”
THE WIRE CHINA: “MATTEO MAGGIORI ON WHO REALLY OWNS LISTED CHINESE COMPANIES”
December 12, 2021
“One issue is that most countries’ statistics count investments in the VIEs as being made in the Cayman Islands and not China. This shapes our view of bilateral exposures among countries. In our work we go further and show that VIEs have influenced our understanding of how much of a creditor nation China is to the rest of the world.”
REPORT TO U.S. CONGRESS on U.S.-CHINA ECONOMIC AND SECURITY REVIEW
November, 2021
“In their study, Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens, Coppola et al. trace corporate ownership chains and assess offshore securities issuance in tax havens to better elucidate U.S. holdings of Chinese securities. Among other things, they find U.S. investor exposure to risks inherent in U.S.-listed, variable interest entity-structured Chinese companies is larger than understood; China’s net foreign asset position may be half of the official value; and U.S. holdings of Chinese securities are larger when measured on the basis of nationality rather than residency.”
The Wire China: “China’s Shell Game”
October 11, 2021
“By emerging as an offshore power, China is now forcing economists to rethink and recalculate its global influence. A recent academic paper, for instance, pointed out that while China held about $1.1 trillion in U.S. Treasury bonds in 2017, a measure of its influence on U.S. interest rates, American investors may hold nearly $700 billion in Chinese equities listed on U.S. exchanges — far more than analysts have previously understood.”
Journal of Finance: “Matteo Maggiori: Winner of the 2021 Fischer Black PrizE”
September 3, 2021
Professor Lustig (Stanford GSB) reviews Matteo Maggiori’s research contributions and highlights the Global Capital Allocation Project: “These investors are subject to a home currency bias. In international finance, many authors have convincingly argued that investors simply prefer securities issued in their own country. This is typically referred to as home bias in investments, but the MNS paper suggests that this effect is swamped by the preference for securities issued in one’s own currency. Only the U.S. dollar is immune to the home currency bias in the corporate bond market. To establish these facts, the authors undertook a massive data effort as part of their Global Capital Allocation project.”
FINANCIAL TIMES FDI MAGAZINE: “A NEW MAP OF GLOBAL CAPITAL ALLOCATION”
June, 2021
“The path from corporate and sovereign borrowers to foreign lenders of capital has gotten more complex and increasingly routes through tax havens. Our research initiative, the Global Capital Allocation Project, offers a variety of tools and results (including those summarized above) to help academics, policymakers, and practitioners see through these intermediaries and better understand the pattern of bilateral portfolio investment.”
NBER Reporter: “The Global Capital Allocation Project”
March 30, 2021
“In recent decades, global flows of assets and goods have grown rapidly relative to GDP and have shifted aggressively during crises such as the global financial crisis and the current pandemic. Corporations and governments increasingly borrow from foreign investors, who face more options for allocating their capital in terms of asset class, currency, and geography. A sense of “who owns what” around the world, and why, is required to understand what these trends mean for the global economy. Our research aims to expand this understanding and explores the key elements driving global capital allocation.”
BLOOMBERG: “TREASURY HAS $541 BILLION OF DIRTY LITTLE SECRETS”
September 21, 2020
“Government data may tell you there’s little at risk — Americans held only $154 billion of Chinese shares in 2017, according to the Treasury Department. This is a gross underestimation, Harvard University’s Antonio Coppola and his colleagues conclude. In a recent paper, the academics put exposure at $695 billion by 2017, or 4.5 times the official figure.“
THE WIRE CHINA: “CHINA’S GLOBAL TREASURE MAP”
September 20, 2020
“The vast majority of Chinese companies listed on the New York Stock Exchange, the Nasdaq, and the Hong Kong Stock Exchange are now incorporated offshore. And most of them have chosen to domicile in the Cayman Islands, […] This practice, according to Matteo Maggiori, who teaches at the Stanford Graduate School of Business, has huge implications on how wealth is measured and tracked around the world.”
IL SOLE 24 ORE: “I paradisi fiscali Ue minacciano la stabilità dei mercati globali”
August 13, 2020 | Google Translation
“Il capitale investito in obbligazioni emesse da società olandesi finisce in destinazioni sorprendenti. Solo la metà rimane nei Paesi Bassi. Il 29% finisce altrove nell’Eurozona, il 4% negli Stati Uniti e il 3,5% in Brasile. […] La situazione irlandese è simile, ma i capitali sono più strettamente legati agli Stati Uniti. Il 58% del valore delle azioni esistenti sul mercato ed emesse da società irlandesi è in realtà da considerarsi emesso da imprese statunitensi.”
NBER DIGEST: “Tax Haven Financing Skews Cross-Border Investment Statistics”
July 1, 2019
“Official statistics on foreign investment show that investors from the United States, the eurozone, and other large developed nations invest relatively little in large, fast-growing, emerging markets. These statistics are misleading […] because they don't take into account the holdings of securities issued in tax havens, many of which represent claims on emerging market firms.”
IL SOLE 24 ORE: “Come i paradisi fiscali amplificano l’instabilità dei mercati finanziari”
April 24, 2020 | Google Translation
“La politica economica internazionale deve fare attenzione alle reali esposizioni finanziarie per non basare le decisioni su dati e fatti distorti dai paradisi fiscali.”
Financial Times: “Emerging market debt burdens may be sorely understated”
April 3, 2020
“Recent paper […] suggests the true ownership of EM bonds by overseas investors is much greater than shown in standard data — in some countries, by many multiples. […] You read a lot about the possibility of China dumping its US Treasuries but very little about the possibility of China imposing its own regulations. If we’re talking about one, we should certainly be talking about the other.”
IL SOLE 24 ORE: “A TAVOLA (VIRTUALE) CON MATTEO MAGGIORI”
March 22, 2020 | Google Translation
“Matteo Maggiori è uno degli economisti italiani più accreditati a livello internazionale. […] Il Covid-19 muterà il pensiero economico e le politiche economiche dei prossimi dieci anni. Lo sta già facendo.”
The EConomist: “Cash sloshes around the world in unexpected ways”
February 20, 2020
“Antonio Coppola of Harvard University, Matteo Maggiori of Stanford University, Brent Neiman of the University of Chicago and Jesse Schreger of Columbia University […] estimate just how much these financial gymnastics are distorting the official figures. […] Economists may find incorporating these cross-border financial connections into their models hard. But without them, the picture is grossly misleading.”
CENTRAL BANKING: “ECONOMICS IN CENTRAL BANKING AWARD: MATTEO MAGGIORI, BRENT NEIMAN AND JESSE SCHREGER”
February 5, 2020
“The Global Capital Allocation Project has helped pick apart the tangled network of cross-border capital flows. The work may prove essential to those looking to shore up the international monetary system.”
Market Watch: “Why the U.S. dollar will continue to reign supreme”
October 11, 2019
“The U.S. dollar’s role as an international and safe-haven currency has surged since the global financial crisis,” the authors write, so that today it appears to be “the world’s only international currency.”
Financial Times, Alphaville: “China VIE: The ScAle of Exposure”
October 10, 2019
“Coppola, Maggiori, Neiman, and Schreger outline the scale of the global exposure to the VIE structure.”
La Nacion: “Brent Neiman: Hay una desproporción en la utilización del dólar”
August 30, 2019 | Google Translation
“El académico [...] señala que el dólar es la moneda predominante en el mundo porque cuando hay una crisis, en vez de perder valor, se fortalece. Además analizó los beneficios y los costos de unificar la moneda argentina con Brasil.”
World economic forum: “This is the impact of the home currency bias”
September 11, 2018
“Almost all owners of foreign bonds hold that debt in their own currencies, rather than in the currency of the nation where the debt was issued. This home currency bias is so strong that, if one knows the currency in which a bond is issued, it is possible to make a very good guess about the nationality of its owner without knowing the nationality of the debt issuer.”
NBER DIGEST: “Debt Markets Are Biased toward Home Country Currencies”
September 3, 2018
“Many investors avoid currency risk when buying debt issued by borrowers in foreign countries, but the U.S. dollar's international status makes dollar-denominated debt an easier sell.”
FORBES: “Trade Wars, Dollar Dominance And What It Means For Global Investing”
July 3, 2018
“Starting at the time of the global financial and Eurozone crises, the share of corporate bond holdings denominated in U.S. dollars surges while that denominated in euros collapses.”
Pensions & Investments: “AQR Insight Award granted to Two papers this year”
June 28, 2018
“In ‘International Currencies and Capital Allocation’, the authors revealed that although global investors have a strong bias for their home currency, there's still an international preference for the U.S. dollar.”
Wall STREET JOURNAL: “In a Dollarized World, a Rising Dollar Spells Pain”
May 9, 2018
“Investors overwhelmingly prefer bonds denominated either in their own currency, or dollars.”