Negative rates explained: should UK investors prepare? (Schroders,6 min read)

Fifty Shades of QE: Central Bankers Versus Academic (VoxEU, 3 min read)

The Eurosystem: An accident waiting to happen (Vox EU, 10 min read)

The Danger of Following the Fed (Project Syndicate, 4 min read)

Average inflation targeting and household expectations (Vox EU, 6 min read)

The Economics of Currency Risk (NBER, 24 page read)

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.

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]

Covid-19 briefing: heterogeneous impacts of the pandemic (Bank Underground, 5 min read) Summarises recent literature finds ‘workers in jobs with close proximity to others had the most adverse labour market outcomes’ and ‘workers in more vulnerable jobs  tend to be less educated, have lower incomes, and are more likely to be renters.’

The international dimension of an incomplete EMU (ECB, 59 page read) ECB finds ‘euro area stress shocks are significant not only for the euro area but also for the rest of the world’.

Scotland after Sterling (Project Syndicate, 4 min read)

Post-COVID Capitalism (Project Syndicate, 4 min read)

3 Reasons to Expect Election Result Delays (Schwab, 3 min read)

Regional Heterogeneity and US Presidential Elections (INET, 35 page read)

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

Global connectedness and market power make firms more resilient to domestic COVID-19 shocks (Vox EU, 6 min read)

Covered Interest Parity in long-dated securities (Norges Bank, 33 page read)

Greater inflation risks ahead (BlackRock, 5 pages read)

How Traders Used Google Searches To See The Economic Recovery In Real Time (Bloomberg Odd lots, 41 min listen)

Hedge Fund Family Ties (Shidler College of Business, 25 page read)

Asian Intervention in the Foreign Exchange Market is Back. Bigly (Brad Setser, 5 min read)

Global Money Dispatch (Credit Suisse, 17 page read) Zoltan Pozsar calculates the G-SIB risk scores for US banks and finds that JPM’s score has increased which could mean ‘much less FX swap intermediation at J.P. Morgan going into year-end and a year-end turn much worse than what’s currently being priced by the market’ [Bearish FX Xccy basis]

Long vs Short Time Scales: The Rough Dilemma and Beyond (arXiv, 33 page read) An econometrics-heavy paper tests the robustness of the rough fractional volatility model over different time scales. It confirms the Hurst exponent is less than 0.5 for shorter time scales, but exhibits a convexity effect in the log-log plot.

Short-term forecasting of the COVID-19 pandemic using Google Trends data: Evidence from 158 countries (Applied Econometrics, 27 page read) Finds Google data can predict COVID cases.

Building ESG momentum in US equities (Amundi, 7 min read)

The Core of the ECB’s New Strategy (Project Syndicate,4 min read)

Green Asset Pricing (ECB, 35 page read)

ESG investing looks like just another stock bubble (Advisor Perspectives, 3 min read)

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.’

Did ESG improve resiliency during Q1 (Jon Hale, 8 min read) Summarises recent academic papers and finds ‘companies valuing stakeholders during pandemic had higher institutional flows and less negative returns’. [Bullish ESG]

Eat clean: The hottest trends as food moves into an ESG-conscious age (CityWire, 2 min read) ‘The way in which food is produced and consumed will come under increased focus in the wake of the pandemic’.