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Investor Sentiment, Sovereign Debt Mispricing and Economic Outcomes (IMF, 18 page read) A country’s underlying fundamentals must inform on its fiscal strategy – it shouldn’t just rely on spreads. Why? Countries borrowing at low spreads relative to fundamentals are more likely to suffer from economic difficulties later on.
Low Interest Rates, Policy, and the Predictive Content of the Yield Curve (NBER, 33 page read) Excellent paper with great datasets. They find that the yield curve does have predictive power even rates are low.
America’s Dual Recession (Project Syndicate, 4 min read) Occupations at risk of automation are also those susceptible to the pandemic-induced recession. Without a firm policy response, the divides between the haves and the have-nots will extend quicker than we imagined.