Perspectives connected to the research.
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A partial recovery in services and retail could leave a disproportionate employment shortfall after the initial pandemic shock. Jonathan Fortun and Sergi Lanau used Spanish retail trade to illustrate how labor intensive sectors translate even modest output losses into substantial job losses. Their August 2020 analysis focused on the employment consequences of an incomplete return to normal activity.
Read the workFortun assesses Brazil's slower recovery in foreign investment and investors' increasing attention to country-specific risks after the pandemic shock.
View detailsArgentina’s debt restructuring could improve external financing prospects if the IMF rolled its exposure into a new program. The August 2020 assessment shifts attention to the remaining fiscal deficit and how to fund it: immediately ending monetary financing would require difficult spending and budget adjustments. Debt relief therefore eased one constraint without resolving the domestic financing challenge.
Read the workDollar 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.
Read the workFortun describes a recovery in parts of emerging-market capital markets and questions how broadly and durably July's renewed investment would spread.
View detailsThe collapse of international tourism threatened a major source of activity in emerging markets during the pandemic. Writing in July 2020, Jonathan Fortun and coauthors estimated that tourism could fall by 60 percent that year even under optimistic assumptions. They anticipated an uneven recovery, with Asia and Europe better positioned, while emphasizing that uncertainty over the pandemic made the outlook unusually fragile.
Read the workImport compression was reshaping emerging markets’ external balances during the pandemic. Jonathan Fortun and Sergi Lanau compare trade trends in the first half of 2020 and find imports falling sharply enough to outweigh export losses in almost every country examined. Their July assessment anticipates the disappearance of current account deficits through this crisis adjustment.
Read the workPandemic 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.
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