From global markets to questions of development, money and economic activity.
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Bolivia’s IMF program has advanced on exchange rate reform and central bank financing, but fuel pricing remains its hardest political test. Jonathan Fortun examines how currency depreciation and import costs have eroded earlier subsidy reforms, arguing that postponement can shift the adjustment from higher pump prices to shortages. The essay connects reform sequencing with the credibility of the 2027 budget.
View detailsShort-term dollar weakness need not signal a lasting loss of the currency's international role. The analysis finds gradual reserve diversification alongside continued dominance in trade invoicing, funding and payments, while local-currency borrowing still leaves economies exposed to US yields and hedging costs. Treasury market liquidity and collateral functions remain central. Changes in payment infrastructure alone do not establish displacement; that would require broader evidence across reserves, currency trading and invoicing.
Read the workA changing investor base is adding pressure to Japan's longest bonds as the Bank of Japan reduces its purchases. Weaker demand from life insurers and greater foreign participation make yields more sensitive to global bond-market conditions, even after reductions in super-long issuance. Stabilizing long-term borrowing costs may therefore require domestic demand, changes in issuance maturities or direct bond-market measures alongside decisions about the policy rate.
Read the workJuly brought $18.8 billion in net portfolio inflows to emerging markets as equity withdrawals slowed sharply. Debt attracted $26.7 billion, while Asia shifted from the main source of outflows to the largest regional contributor. The note warns that a more hawkish Federal Reserve, coordinated yen intervention and geopolitical tensions could weaken the interest-rate advantage supporting debt inflows.
Read the workFortun contrasts Bolivia's historical currency redenomination with its current exchange-rate adjustment, using an equilibrium-rate framework to argue that nominal change can precede deeper economic repair.
View detailsAfter coordinated US-Japan intervention, the note estimates a medium-term yen equilibrium range of 125–138 per dollar, stronger than the market rate near 157. It distinguishes the model's unadjusted signal from a more conservative undervaluation estimate and shows how investment income retained abroad limits currency-market demand. Intervention may alter near-term risks, but sustained convergence would depend on a better policy mix rather than repeated currency purchases.
Read the workFortun contrasts Bolivia's exchange-rate announcements and IMF staff agreement with limited usable reserves, arguing that simultaneous policy headlines do not by themselves resolve the external constraint.
View detailsAI is reshaping international trade and capital allocation before its productivity gains are established, the authors argue. Their analysis distinguishes supplying chips and equipment from owning platforms and intellectual property that earn recurring income. Emerging economies may gain productivity through adoption while still paying more for imported hardware and digital services. Building exportable digital capacity could instead attract lasting investment and improve external balances.
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