There’s no single best way to quantify it, but if I had to point to one set of charts, I would say that fiscal dominance occurs when annual public deficits exceed the sum of annual net bank lending and annual net corporate bond issuance on a sustained basis, especially without having been caused by a recession.

When looking at U.S. markets, I think there’s a little bit from both of those areas that can be helpful. During periods of fiscal dominance, the general trends are that 1) governments often try to restrict the flow of capital in subtle or overt ways, 2) asset prices are often not as nominally bearish as you might expect since the denominator is wea