From global markets to questions of development, money and economic activity.
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Historically low US unemployment in early 2020 had not produced a clear acceleration in underlying inflation. Comparing labor force participation with other advanced economies, the analysis argues that substantial unused labor capacity might remain despite the low headline unemployment rate. That distinction matters for judging how close the economy is to its productive limits.
Read the workThe slowdown in emerging economies after the global financial crisis was sharper than the US experience commonly associated with secular stagnation. Jonathan Fortun and Robin Brooks connect that weakness with subdued investment and lower commodity prices. Their December 2019 analysis asks whether forces beyond the commodity cycle were holding back emerging market growth.
Read the workAn inventory correction offered an alternative explanation for weak global manufacturing in late 2019. Jonathan Fortun and Robin Brooks argue that excess stocks, rather than trade tensions disrupting supply chains, accounted for much of the slowdown. By December, an improving leading indicator suggested that the inventory adjustment might be nearing its end.
Read the workCommodity currency returns reflect both export prices and domestic or global risk. Jonathan Fortun and Sergi Lanau find that commodity prices matter most where trade is less diversified, but that their influence changes substantially over time. The November 2019 analysis also emphasizes shifting sensitivity to other risks, cautioning against treating these currencies as a fixed proxy for commodity prices.
Read the workPersistently weak inflation challenged estimates that the euro area periphery was close to full employment in 2019. Jonathan Fortun, Robin Brooks and Sergi Lanau explained a Phillips curve method that lowers the estimated unemployment rate consistent with stable inflation when observed inflation is subdued. Their calculations implied substantially more unused labor capacity than the consensus, while remaining consistent with US Congressional Budget Office estimates for the United States.
Read the workEmerging markets received $22.5 billion in portfolio inflows in October 2019, overwhelmingly through debt securities. Benjamin Hilgenstock and Jonathan Fortun separate $21.3 billion of debt inflows from $1.2 billion in equities. They also report September outflows of $31.4 billion on the broader net capital flow measure, distinguishing the two periods and concepts.
Read the workGermany’s industrial weakness complicated efforts to lift euro area inflation in October 2019. Jonathan Fortun and Robin Brooks trace pressures from the automotive sector, environmental standards and weak exports to the United Kingdom and Turkey. They argue that this downturn compounded deflation risks already associated with unused economic capacity in the euro area periphery.
Read the workResilient services offered support for global activity despite weak manufacturing in October 2019. Jonathan Fortun and Sergi Lanau emphasize the large contribution of services to growth while identifying economies more exposed to industrial swings. Germany, Japan, China, Indonesia and Korea stood out as vulnerable to the manufacturing cycle.
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