Maggiori and Schreger join the Macromusings podcast to talk about their GEOECONOMICS research
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 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.”
WALL STREET JOURNAL: “ESG Investors Have Ethical Motives. They Also Expect to Outperform the Market”, august 2023
“Investors who report higher expected returns from ESG investments hold a higher share of ESG funds in their portfolios,” the researchers conclude. “Investors who are more optimistic about ESG returns invest more in ESG funds,” they add.
BANCO DE ESPANA: BERNACER PRIZE AWARD CEREMONY, June 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.”
REUTERS: “DEBT CEILING DEBACLE IS ULTIMATE WINNER’S CURSE”, MAY 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 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.”
Russia embraces China’s renminbi in face of western sanctions, MARCH 2023
“Matteo Maggiori, professor of finance at Stanford Graduate School of Business, highlighted the unequal nature of Russia and China’s financial relationship. “Given Russia’s international situation, the dependence on the renminbi has been a forced choice,” he said.”
THE NEW YORK TIMES: “CHINESE COMPANIES ARE DOING RISKY BUSINESS IN THE CARIBBEAN, March 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 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 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 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 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 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 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.”
Observatorio del Banco Central Europeo: “MATTEO MAGGIORI, WINNER OF THE 21st EDITION OF THE BERNACER PRIZE”, July 2022
“The Selection Committee of the German Bernacer Prize has decided to award the 21st edition of the prize to Matteo Maggiori (Stanford Graduate School of Business) “for his influential research on international finance and macroeconomics, including asset pricing and exchange rate dynamics”.
The Germán Bernácer Prize is awarded annually to an European economist under age 40 who is judged to have made outstanding contributions in the fields of macroeconomics and finance. After twenty-one consecutive editions, it is widely regarded as one of the most prestigious awards for European economists.”
Related: GSB article
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 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 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.”
Related: SIEPR article
the wire china: “Matteo Maggiori on Who Really Owns Listed Chinese Companies”, december 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 US 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 2021
“If you ask a professional economist about offshore tax havens, they’ll say something about inequality. Rarely will they mention China,” Maggiori says. “But in the securities market, China now plays an enormous role. And many of those securities are registered in tax havens —so there’s risks behind that.”
Journal of Finance: “Matteo Maggiori: Winner of the 2021 Fischer Black Prize”, September 2021
My colleague Hanno Lustig generous review of my work: “Maggiori's research attacks important questions at the intersection of international finance, asset pricing, international macroeconomics, and even household finance. Maggiori's career is still in the first inning, but his work has already had a significant impact on the field of international finance and economics. International finance has experienced a renaissance of sorts in the last decade or so, and Maggiori is in the vanguard of a new cohort of researchers who are leading the charge.”
il sole 24 ore: “Preoccupa l’esposizione ai titoli da parte di fondi e investitori retail”, September 2021
“Impossibile non parlarne al telefono con Matteo Maggiori, l’economista di Stanford che nell’ambito del Global Capital Allocation Project, da lui cofondato e diretto, ha tracciato la grande incognita dei flussi finanziari cinesi.”
Carlo Alberto Medal Lecture: “The Global Capital Allocation Project”, June 2021
An honorary talk to receive the medal. I talk about our recent research at the Global Capital Allocation Project on home-currency bias, international currencies, and the role of offshore financial centers.
Video | Medal Mention | Slides
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.”
corriere della sera: “Colossi Cinesi nei “paradisi” quei rischi nascosti”, June 2021
“Con il mio gruppo di lavoro, abbiamo trovato che l’esposizione occidentale alla Cina e’ alta anche attraverso canali di cui spesso non c’e’ molta consapevolezza. E a maggiore ragione colpisce che il dibattito globale sui paradisi fiscali coinvolga cosi poco la Cina.”
il sole 24 ore: “Cosa succede se la Cina bussa alle porte dei paradisi fiscali delle Big Tech”, may 2021
Partendo da questa premessa, Matteo Maggiori, economista, docente a Stanford e animatore del progetto Globalcapitals incentrato sull’analisi e la rilocalizzazione dei flussi finanziari, ha ricostruito con un pool di colleghi i passaggi per arrivare a un risultato che dribbla tutte le statistiche ufficiali: […] Riallocando i flussi e tenendo conto dei valori del mercato azionario delle Vie si scopre che il net foreign asset (Nfa), l’attività estera netta della Cina, ne esce dimezzata.
Macro musings podcast: “Matteo Maggiori on the Global Capital Allocation Project, Exorbitant Privilege, and Dollar RunS”, April 2021
A wide ranging conversation with Macro Musings podcast on my research. From GCAP research on international currency, capital allocations, and tax havens to my theoretical work on the international monetary system.
NBER Reporter: “The Global Capital Allocation Project”, March 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.”
“The economics of debt in a post Covid-19 world” keynote speech at ISSNAF Bay Area, January 2021
I talk about debt sustainability and my research on the international monetary system. Introductory remarks in Italian, the talk is in English.
Stanford GSB Magazine: “Voices of Stanford GSB: Matteo Maggiori”, March 2021
“In parallel with theoretical modeling, Maggiori has undertaken several groundbreaking empirical projects. “There are many big questions that remain unexplored because of data issues,” he says. “When I start to get the sense that the right kind of data is becoming available to take a serious stab at these questions, then I get excited.”
il bollettino: “L’economista Maggiori: «Serve un piano credibile di riduzione del debito»”, Febrruary 2021
“In economia internazionale ho co-fondato il Global Capital Allocation Project con i miei colleghi Brent Neiman, della Chicago University, e Jesse Schreger, della Columbia University. Studiamo come viene allocato il capitale globale, le imperfezioni e i possibili interventi della politica economica. Recentemente ci siamo focalizzati sul ruolo delle valute internazionali come il dollaro, i paradisi fiscali e l’espansione della Cina nei mercati finanziari globali. Mi piacerebbe capire meglio il ruolo che il capitale internazionale ha svolto nella recente pandemia”
corriere della sera: “Da Roma a Stanford, giovani economisti (italiani) crescono”, january 2021
“Nelle ultime settimane del 2020 Matteo Maggiori ha vinto la Fischer Black Medal. È il premio assegnato ogni due anni dall’American Finance Association al miglior economista finanziario con meno di quarant’anni. […] «Quando ero studente non avevo neanche la concezione di poter fare il ricercatore e che questa carriera esistesse al di fuori di una vita monastica», dice. «Ma fare ricerca non è lavoro, è una vocazione. Se vuoi farlo, non faresti altro».”
FX policy when financial markets are imperfect - bis annual conference (webinar), december 2020
I talk with the BIS about my research on exchange rate policy when markets are segmented. FX intervention is now used on a grand scale in many economies, including developed ones. I discuss what we know and do not know so far about this policy tool; its benefits and risks.
American Finance Association: “Announcement of 2021 Fischer Black Prize Winner”, November 2020
“Matteo Maggiori has been selected by the AFA to receive the 2021 Fischer Black Prize for an outstanding financial economist under age 40.”
Il sole 24 ore: “I giovani economisti italiani vanno lontano”, october 2020
“Un'altra forma per mantenere i contatti scientifici con questa diaspora è la medaglia Carlo Alberto, che ogni due anni premia il miglior economista italiano under 40. Nel 2019 è andata a Matteo Maggiori di Harvard, che collabora anche con questo giornale, e nel 2017 ad Alessandra Voena di Stanford”
Bloomberg: “Treasury Has $541 Billion of Dirty Little Secrets”, September 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 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.
OPED in il sole 24 ore: I paradisi fiscali Ue minacciano la stabilità dei mercati globali, August 2020
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 2020
“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, according to the findings presented in Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens, because they don't take into account the holdings of securities issued in tax havens, many of which represent claims on emerging market firms.”
Articles In Memoriam of Emmanuel Farhi (RIP), July/August 2020
Soumaya Keynes in the Economist
My article in Il Sole 24 Ore, and the same in english in ProMarket
Oped in Il Sole 24 ore: “La cicala americana minaccia il sistema monetario globale”, June 2020
“Sorprende in quest’ottica che la stabilità del sistema monetario internazionale non venga considerata uno dei maggiori rischi futuri. Nel risveglio dal lockdown del Covid-19, il mondo si ritroverà con livelli di debito alti in molti Paesi. I maggiori debiti sono in buona parte giustificati dall’espansione fiscale per fronteggiare il Covid-19. Tuttavia, questi debiti porteranno ulteriori rischi e problemi. Ignorarli, o pensare che si pagheranno da soli, è il modo più sicuro per massimizzare la probabilità di un’altra crisi.”
The international monetary system: debt in the post covid-19 world - 1-Hour Talk con Matteo Maggiori, June 2020
I talk with the LUISS Alumni Association about my research on the monetary system and the role of the dollar. Thinking about risks of mounting debt levels for the long run.
Oped in Il Sole 24 ore: “Come il Covid-19 ha cambiato le prospettive degli investitori”, May 2020
“In collaborazione con Vanguard, il colosso americano di gestione del risparmio, abbiamo misurato le aspettative dei loro clienti poco prima del collasso, a febbraio, e subito dopo, a metà marzo e aprile. Dopo il crollo dei mercati, gli investitori sono diventati molto più pessimistici sui ritorni azionari nei prossimi dodici mesi.”
Oped in Il Sole 24 ore: “Come i paradisi fiscali amplificano l’instabilità dei mercati finanziari”, April 2020
“La politica economica internazionale deve fare attenzione alle reali esposizioni finanziarie per non basare le decisioni su dati e fatti distorti dai paradisi fiscali.”
SEACEN podcast: “In Conversation with Matteo Maggiori”, April 2020
I talk with SEACEN about the work that we are doing at the Global Capital Allocation Project. Explaining home-currency bias, the international role of the dollar, the role of tax havens for global capital flows and in particular China's offshore companies.
Financial Times: “Emerging market debt burdens may be sorely understated”, April 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. […] “If we are going to see a wave of corporate defaults, it’s a risk worth thinking about that a lot of issuance has taken place offshore,” he said. “[Our work] shows that exposures are quite large.”
Il sole 24 ore: “A Tavola (Virtuale) con Matteo Maggiori”, March 2020
“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 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 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”
oped in Il sole 24 ore: “La lira che alcuni vorrebbero e quella che tutti avremmo”, January 2020
“L'Italia sarebbe meglio servita nel non perseguire populistici sogni di abbandono dell'euro, ed invece concentrare gli sforzi nel migliorare l'attuale moneta unica.”
Financial Times, Alphaville: “China VIE: The SCale of Exposure“, October 2019
“Coppola, Maggiori, Neiman, and Schreger outline the scale of the global exposure to the VIE structure.”
Carlo Alberto Medal AwaRd, October 2019
Matteo Maggiori has been awarded the 2019 Carlo Alberto Medal as the outstanding Italian economist under the age of 40.
WALL STREET JOURNAL: “You, Dear Investor, Are Patient, Prudent and Calm”, APRIL 2019
“Investors in the study […] even when they raise or lower their expectations of future stock returns, they seldom make big trades based on those beliefs”
Guggenheim Fellowship Award, March 2019
Matteo Maggiori was one of the two economists to receive the Guggenheim Fellowships for 2019.
Yahoo Finance: "Five game-changing papers from this year's largest gathering of economists", January 2019
“Farhi and Maggiori write that if this chain of events occurs, the U.S. dollar could lose its perception as a safe asset and cause the entire international monetary system to destabilize.”
WORLD ECONOMIC FORUM: “THIS IS THE IMPACT OF THE HOME CURRENCY BIAS”, September 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”, Septe,ner 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 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.”
Maggiori, Neiman, Schreger Win the AQR Insight Award, June 2018
The paper “International Currencies and Capital Allocation” by Maggiori, Neiman, and Schreger, wins the 2018 AQR prize.
WALL STREET JOURNAL: “IN A DOLLARIZED WORLD, A RISING DOLLAR SPELLS PAIN”, MAY 2018
“Investors overwhelmingly prefer bonds denominated either in their own currency, or dollars.”
NSF CAREER Grant Award, March 2017
Matteo Maggiori has been awarded a NSF CAREER grant to study “Global Capital Flows”.
Bloomberg: "A Breakdown in Old Rules Leads to a Rethink on How Global Markets Work", June 2016
“[…] exchange rates are jointly determined by capital flows and by the financiers’ risk bearing capacity. […] This is not at all the traditional understanding of what determines exchange rates, which has largely to do with macroeconomic fundamentals. The theory, however fits well with what we see in the foreign-exchange derivatives market.”
corriere della sera, la lettura: “Al Job Market degli economisti”, January 2016
“Vengono per presentare i loro lavori e ascoltare quelli altrui.[…] Non sono solo giovani stelle in ascesa come Matteo Maggiori”
The Economist Free exchange: “Not So Impatient“, April 2015
“The economists calculate that homeowners discount future benefits over the very long run at a rate of 2.6% per year. This is lower than the rates used by governments to assess infrastructure projects or by pension funds to evaluate their liabilities, and suggests that the general public is more patient than the authorities give it credit for.”
CBS News: "How much do we care about future generations?", June 2014
“The problem in assessing the present value of climate policy that will benefit future generations decades or centuries from now is that we do not have information on very long-term discount rates. However, a recent paper by finance professors Stefano Giglio, Matteo Maggiori and Johannes Stroebel makes use of a unique data set that allows insight into this question.”
National Review: "We Should Discount the Costs of Climate Change, But Maybe Not That Much"
“The authors find out that the discount rate people apply over the very long term is pretty low — meaning that people, when their money is on the line, do seem to care about what it’s doing in 100 or 150 years.”
The Economist free exchange: “Weighing the Future“, May 2014
“[…] people pay a premium of 10%-15% less for 100-year leaseholds and 5%-8% less for leaseholds of between 125-150 years. Only for leaseholds of 700 years or more [there is] no difference in price. On the whole, […] a discount rate of about 2.6% appears to apply out well beyond a century.”
Forbes: “How Real Estate Tells Us About The Distant Future”, March 2014
“Stefano Giglio, Matteo Maggiori and Johannes Stroebel have a paper that does a very nice job of showing how much people care about the future--the distant future. […] This finding has important implications for, among other things, environmental issues”
Lettau, Maggiori, Weber Win the AQR Insight Award, June 2013
The paper “Conditional Risk Premia in Currency Markets and Other Asset Classes” by Lettau, Maggiori, and Weber wins the 2013 AQR prize.