February 11, 2021IIF
Global Macro Views: Full Employment Output Gaps
The report uses prime-age employment to assess economic slack after Covid-19 and to place conventional output-gap estimates in context.
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February 9, 2021IIF
Economic Views: India’s Budget and Fiscal Vulnerability
India’s budget offered an immediate spending boost after a limited fiscal response to the pandemic in 2020. Jonathan Fortun and coauthors expected that support to strengthen growth in the first quarter of 2021, followed by a broadly neutral budgetary contribution. Their assessment links the wider medium term deficit target to debt stabilization, while stressing that a high debt burden would continue to constrain room for fiscal policy.
Read the workFebruary 4, 2021IIF
Global Macro Views: Output Gaps for Italy and Spain
The authors use inflation evidence to assess economic slack in Italy and Spain, comparing their estimates with IMF output gaps and emphasizing measurement uncertainty.
Read the workFebruary 2, 2021IIF
Capital Flows Tracker: Flows Remain Strong (January 2021)
Debt securities dominated portfolio inflows into emerging markets in January 2021. Jonathan Fortun reports $44.2 billion entering debt and $9.4 billion entering equities, with Chinese stocks receiving $6.2 billion of the equity flows. The composition shows how heavily the continued recovery depended on bond investment.
Read the workFebruary 2, 2021IIF
Economic Views: EM Public Financing Needs
Large pandemic deficits were set to keep government funding requirements elevated even as emerging economies recovered. Jonathan Fortun and Sergi Lanau develop a framework to monitor those needs and the currency composition of debt service. Their February 2021 assessment identifies Brazil and South Africa as facing the highest public financing requirements that year.
Read the workJanuary 28, 2021IIF
Global Macro Views: Inflation-Consistent Output Gaps
The authors compare US and euro-area output-gap estimates with core inflation using Phillips curves, highlighting the uncertainty involved in measuring economic slack.
Read the workJanuary 26, 2021IIF
Economic Views: Can EMs Create Enough Jobs?
The report estimates the relationship between economic growth and job creation in emerging markets, asking whether slower underlying growth can support adequate employment outcomes.
Read the workJanuary 21, 2021IIF
GMV: Lessons from the 2013 Taper Tantrum
How bond yields react to unexpectedly strong data can reveal whether markets trust central bank guidance. Robin Brooks and Jonathan Fortun revisit turning points in the 2013 taper tantrum, when positive surprises increasingly pushed US rates higher. Their January 2021 comparison uses that experience to assess the credibility of the Federal Reserve’s new average inflation targeting framework.
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