Fed's favored yield curve recession indicator finally inverts

Our work at IMF Africa quoted here in The Economist. 📈🌍 w/ Marijn A. Bolhuis Hamza Mighri Ivanova Reyes Qianqian Zhang

Here’s a link to the analysis, part of the spring 2023 Regional Economic Outlook for sub-Saharan Africa. imf.org/en/Publication…

SSA stands to lose the most (-4% gdp) in a severely fragmented world compared to other regions, but could also benefit from strategic decoupling.

Rising trade barriers marks a remarkable shift away from the trade liberalization of the 20th century, risking higher prices and lower incomes for households. Marijn A. Bolhuis Ben Kett IMF imf.org/en/Publication…

Geoeconomic fragmentation's costs are enormous. Estimates of exclusive trade alignment with US+EU vs Russia+China would reduce global output by 2.3% of GDP, finds Marijn A. Bolhuis Ben Kett IMF imf.org/en/Publication…

In their chapter of the new CEPR/IMF eBook, Marijn A. Bolhuis, J Chen & Ben Kett IMF explore the #economic costs of fragmentation from an #InternationalTrade perspective, with a focus on production & #trade of commodities. ow.ly/hMkn50PUxJ3

How the Brady Plan Delivered Debt Relief-important new paper by⁦IMF⁩ Brady bonds have been a cornerstone of drgr.org proposal ⁦ying qian⁩ ⁦Stephany Griffith-Jones⁩ ⁦Uli Volz⁩ ⁦María Fernanda Espinosa⁩ ⁦⁦Marina Zucker-Marques⁩ imf.org/en/Publication…

This working paper finds that Brady-style mechanisms could be useful to deliver haircuts, faster growth, & enhanced market access for distressed sovereigns. To be most effective, they should be accompanied by creditor coordination & willingness for reform. imf.org/en/Publication…

Excellent IMF working paper on Brady Plan lessons: "The results of this paper show that the Brady Plan’s success applied to debtors under specific conditions relating to, inter-alia, countries that previously had market access and had been targets for the original Baker Plan .."

1/8 The IMF has just published an interesting paper on the impact of Brady restructurings, which included partial debt forgiveness, on the overly-indebted developing countries of the 1980s. This might provide useful lessons for future restructurings. imf.org/en/Publication…

Great summary on IMF paper on Brady restructurings, which are very relevant today.

A useful thread on new #IMF research that should be useful for those following #SriLanka debt negotiations. It sounds like more generous debt relief now might be helpful for everyone further down the line. What a crazy idea.

The Brady bond restructuring of emerging market debt was the eventual solution to the Latin American debt crisis of the 1980/ when US interest rates reached record high levels and many high fertility countries defaulted (low fertility Chile / Uruguay did not). Relevant today

New NBER: "The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly" nber.org/papers/w32163 "lows in US consumer sentiment that cannot be explained by unemployment and official inflation are strongly correlated with borrowing costs..."

Larry Summers figured out the sentiment puzzle (it's interest rates) nber.org/papers/w32163?…

"Lows in US consumer sentiment that cannot be explained by unemployment and official inflation are strongly correlated with borrowing costs and consumer credit supply...consumer sentiment gaps across countries are also strongly correlated with changes in interest rates."

Discursive cultural victory: Larry Summers wrote a NBER paper about my shitposts. nber.org/papers/w32163

I wrote up this theory in September, and Larry Summers, Marijn A. Bolhuis, Judd Cramer, and Karl Oskar Schulz not only came out with a paper laying it out in more detail but they actually cited my Substack post. thebignewsletter.com/p/strikes-and-…

In new NBER paper with Marijn A. Bolhuis, Judd Cramer and Oskar Shulz, we argue that the unprecedented increase in borrowing costs is crucial to explaining the low consumer sentiment of the last two years. 1/N nber.org/papers/w32163