How should I position my portfolio if inflation comes back? (JP Morgan Asset Management, 2 min read)

Forecasting the COVID-19 Recession and Recovery: Lessons from the Financial Crisis (ECB, 36 page read)

Gold Will Outperform Stocks Until Inflation Surges  (Seeking Alpha, 4 min read)

Why inflation in the US has been so stable since the 1990s (Vox EU, 7 min read)

What We Learned-And What We Didn’t- From the September 2020 Powell Press Conference (Notes on crises, 6 min read)

Exchange Rates and Domestic Credit – Can Macroprudential Policy Reduce the Link? (IMF, 27 page read) Tighter macroprudential policy and targeted capital controls can reduce an increasing credit-to-GDP gap following an exchange rate appreciation.

Issues arising from the new ‘Powell doctrine’ (Vox EU, 6 min read) Economist Ignazio Angeloni points out that AIT assumes past inflation gaps may alter expectations. Still, there is no evidence that expectations are backwards-looking. The framework is asymmetric too- ‘shortfalls of employment are corrected, excesses are not’. Likewise, the new framework will be abandoned if deflation risk goes away making the framework time-inconsistent.

Does quantitative easing boost bank lending to the real economy or cause other bank asset reallocation? The case of the UK (BoE, 56 page read) ‘we find no evidence that suggests that QE directly boosted bank lending to the real economy’ Gulp. [Bearish UK assets]

Inflation at Risk in Advanced and Emerging Market Economies (BIS, 23 page read) Inflation risks are country-specific. In many advanced countries, the zero lower bound is shown to be a prominent source of downside inflation risk. Meanwhile, large exchange rate depreciations are associated with upside inflation risks in EMEs.

Raising taxes could tip us back into recession (The Article, 5 min read) George Magnus argues there is no need to raise taxes. [Bearish UK assets]

Most Americans Want To Wait Until After The Election To Fill The Supreme Court Vacancy (FiveThirtyEight, 6 min read)

What Ruth Bader Ginsburg’s Death Means for America (The Atlantic, 5 min read)

The Big Cycles of China and Its Currency (Ray Dalio, 15 page read)

Lop-sided Chinese recovery (Twitter, 3 min read) Michael Pettis remains pessimistic on China despite the recent upbeat data. Faster growth in IP relative to consumption may cause a slowdown in growth due to unsustainable debt levels. Beijing should focus more on improving domestic demand rather than pushing supply-side policies. [Bearish CNY]

Benefits from higher female representation plus the number of ESG ETS continue to rise

Economic Aspects of the Energy Transition (NBER) Paper argues that we are not correctly accounting for the increase in electricity prices.

Forced Feminist Firms  (NBER, 34 page read) Reduced turnover, increased productivity and female leadership are important mechanisms leading to observed performance gains of private and public firms. Mounting pressure to improve female representation can, therefore, lead to positive growth externalities. 

Competition Heats Up For ESG ETFs (Banking Exchange, 3 min read) New data finds ‘number of tracker funds with a dedicated ‘sustainable’ focus hit 534 by the end of the second quarter of 2020.’