How money, financial systems and policy shape economic activity, and how we measure the forces beneath the surface.
The same financial shock can produce very different economic outcomes. Understanding why means looking beneath aggregate indicators at the monetary arrangements, financial institutions and policy choices that connect markets with economic activity. That connection sits at the center of my work in global macroeconomics.
Measurement is part of the question. Research on economic slack in the eurozone examines how we assess an economy's room to grow. Work on derivatives, bank loan quality and exchange rate valuation explores the financial channels through which risks and incentives take shape. Analysis of Japan adds a perspective on monetary policy and its international setting.
Together, these strands ask how the architecture of finance influences economic adjustment. This page connects academic research, institutional analysis and public discussion so readers can follow an idea across different methods, markets and moments, and return to the original evidence.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Marcello Estevão and Jonathan Fortun examine how the AI investment boom may affect the cost of long term capital. Five AI intensive companies raised $157 billion through August 2026, adding $108 billion in ten year equivalents, about one fifth of long end Treasury supply. Bond markets absorbed this duration without lasting borrower specific repricing, but the authors argue that stronger investment can still raise the common real rate. Emerging markets may face costlier dollar financing even as countries able to host AI infrastructure attract capital.
Emerging market governments are issuing foreign currency bonds at a record pace despite the Iran war, higher global interest rates and a stronger dollar. Jonathan Fortun tells the Financial Times that investors increasingly see the asset class as safer. He distinguishes gross issuance from fresh financing, noting that only $72 billion of this year’s total will represent new money rather than refinancing. The reporting also examines the shift toward euro borrowing and efforts to rebuild foreign exchange reserves.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Marcello Estevão and Jonathan Fortun argue that higher US long term yields primarily reflect the real returns investors demand, rather than a sharp rise in inflation compensation. Persistent federal borrowing adds to financing pressures across the economy, but markets are not visibly imposing a larger Treasury specific premium than at the start of the year. Refinancing older debt at higher rates will continue to lift federal interest costs even if yields stabilize, while deficits before interest payments make the debt outlook more sensitive to growth and interest rates.
Jonathan Fortun · Martín Castellano · María Paola Figueroa / Institute of International Finance
Fiscal credibility shapes borrowing costs through different channels across Latin America. Jonathan Fortun, Martín Castellano and María Paola Figueroa contrast Brazil’s high domestic financing costs with Mexico’s sovereign repricing ahead of a rating downgrade. In Colombia, lower spreads already reflect expectations of political and fiscal improvement, leaving the country exposed if those expectations are not met. The comparison places institutional strength and credibility alongside debt levels when assessing sovereign risk.
Emerging markets received $11.3 billion in portfolio inflows in August, almost entirely through debt, while equity investment remained weak. Investing.com cites Jonathan Fortun’s assessment that continued inflows despite rising US long term yields point to investors selecting emerging market assets on their own merits. The article examines the contrast between resilient debt demand and a slower overall pace of inflows.
Bolivia’s central bank sold $35 million as it sought to reduce exchange rate volatility. Jonathan Fortun tells Central Banking that the parallel market was already pricing a stronger boliviano than the official fixing, interpreting the sale as an adjustment toward market pricing. His comments connect currency intervention with the competing need to accumulate foreign exchange reserves under the proposed IMF program.
Bolivia plans to eliminate fuel subsidies by 2027 as part of its fiscal adjustment under a $1.9 billion IMF program. Jonathan Fortun warns that the subsidy cuts arrive before other reforms can deliver results. He highlights limits on central bank financing as a credible commitment and identifies the removal of lending rate caps and credit quotas as a major political test.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Higher long yields increasingly reflect the real cost of capital. Real yields explain most of the 2026 increase in the United States and Japan, while inflation compensation plays a larger role in Britain and Germany. Bond and swap markets reveal how fiscal demands compete for savings. Debt management and currency intervention can buy time, but durable relief requires fiscal adjustment and credible inflation control.