A working paper from the European Central Bank surveys the emerging economic literature on safe assets.
In Safe assets: a review, Pascal Golec and Enrico Perotti note several conclusions from recent work. Evidence from several researchers suggests that there is “a demand for safety quite distinct from liquidity and classic money demand”, they write. This demand appears to be time-varying, they say.
A “private supply response by financial intermediaries of (quasi-) safe assets” is a substitute