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.
Robin Brooks · Jonathan Fortun / Institute of International Finance
Weak portfolio inflows do not necessarily mean that foreign investors hold small positions in emerging markets. Robin Brooks and Jonathan Fortun distinguish recent flows, which reflect sentiment, from accumulated holdings shaped by years of inflows and valuation changes. In October 2020, ahead of the US election and further COVID waves, they argued that foreign positioning remained substantial despite the pandemic shock.
Jonathan Fortun · Robin Brooks / Institute of International Finance
Efforts to revive inflation after the pandemic created currency tensions as the United States, euro area and Japan tried to reflate simultaneously. Jonathan Fortun and Robin Brooks compared central bank forecasts in October 2020 and found a much faster projected inflation recovery in the United States. They argued that a weaker dollar against the yen and euro could aggravate this divergence and complicate the other economies’ efforts to restore inflation.
Jonathan Fortun · Robin Brooks / Institute of International Finance
Yield curve control helped the Bank of Japan contain yen appreciation in 2016 by shifting attention away from fears of government bond scarcity. By September 2020, however, the framework constrained policy while other central banks eased aggressively. With larger fiscal deficits easing scarcity concerns, the analysis argued for returning to quantitative and qualitative easing. This is the policy recommendation made at that time.
Jonathan Fortun · Robin Brooks / Institute of International Finance
Why did the pandemic imply a deeper global recession than the financial crisis? The September 2020 forecast projected a 3.8% world contraction, compared with 0.4% in 2009, attributing most of the difference to China and India. China lacked an infrastructure stimulus comparable to 2009, while India faced a sharp lockdown contraction rather than its earlier expansion, weakening the outlook for other emerging economies.
Examines whether persistent weak demand and unequal financial conditions left more economic slack in eurozone periphery economies than conventional output-gap estimates suggested before the pandemic.
Jonathan Fortun · Robin Brooks / Institute of International Finance
Dollar performance against advanced and emerging currencies told different stories in August 2020. Jonathan Fortun and Robin Brooks contrast relative stability against the G10 with appreciation against emerging markets exposed to weaker commodity prices. The absence of a Chinese stimulus comparable to 2009 underpinned their view that a sustained dollar decline was unlikely in the near term.
Garbis Iradian · Jonathan Fortun · Robin Brooks · Ugras Ulku / Institute of International Finance
Pandemic import compression changed emerging market current accounts and the exchange rates consistent with external balance. The July 2020 valuation update identified the Brazilian real as the most undervalued emerging market currency and the South African rand as close to fair value. Turkey’s prospective return to a substantial current account deficit, by contrast, pushed the lira into overvaluation in the assessment.
Jonathan Fortun · Robin Brooks / Institute of International Finance
The March 2020 capital flight hit emerging markets unevenly. Jonathan Fortun and Robin Brooks use newly available monthly balance of payments data to compare nonresident portfolio outflows against each country’s usual volatility. Brazil and India stand out among the hardest hit, while eastern European markets including Poland experienced less severe disruption.