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Testing whether devaluations support growth requires identifying comparable currency episodes first. Robin Brooks and Jonathan Fortun develop an algorithm that detects 27 large real exchange rate declines across emerging and G10 economies since 1990. This June 2023 installment establishes the sample for subsequent analysis of exports and output, rather than presenting those later results.
Read the workTrade links and portfolio investment gave different signals about economic separation from China in June 2023. Robin Brooks and Jonathan Fortun find little evidence of a material retreat in trade, while foreign direct investment excluding reinvested earnings remained resilient. Reduced nonresident portfolio flows instead pointed to investors cutting financial exposure, distinguishing risk reduction from a broader dismantling of commercial ties.
Read the workFortun and Robin Brooks assess how a possible soft landing could draw investment into emerging markets amid a recovery in distressed sovereign bonds.
View detailsThe Silicon Valley Bank failure increasingly looked like a delayed effect of monetary tightening rather than an additional credit shock in June 2023. Robin Brooks and Jonathan Fortun argue that lending standards had not tightened separately beyond the existing rate cycle. That interpretation supported their contemporary forecast of a global soft landing and solid emerging market capital flows as inflation eased.
Read the workFortun cautions that lower Bolivian risk premiums do not resolve fiscal pressure or the shortage of foreign currency.
View detailsFortun contrasts continuing emerging-market inflows in May with persistent selling of Chinese bonds and limited demand for Chinese equities.
View detailsFortun discusses renewed emerging-market inflows alongside continuing withdrawals from Chinese debt. The report contrasts regional investor demand in May.
View detailsCould euro area inflation turn into a wage and price spiral? Robin Brooks and Jonathan Fortun compare broadly shared price increases with subdued negotiated wage growth across much of the periphery. Their May 2023 analysis interprets that divergence as evidence of remaining labor market slack and a stronger role for supply shocks, making an aggregate spiral unlikely.
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