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Even without a rainy day fund, which is an inefficient use of capital, the state could buy financial instruments to hedge a recession. Is it prohibited from doi
by pishpash 4y ago
Even without a rainy day fund, which is an inefficient use of capital, the state could buy financial instruments to hedge a recession. Is it prohibited from doing that?
- lumost 4y agoAt a state level, hedging recession risk suffers from counterparty risk. Who knows who will need bailouts/ who will crash during the next recession. On the other hand California can borrow favorably against future revenues during most recessions.