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AI Financial Advice: How Good Is It, and Is It Fair?
Large language models are becoming the financial advisors of choice for millions. Two new 2026 working papers show that LLM advice broadly follows sound economic principles, nudging users toward diversified equity and prudent saving. Yet it relies on heuristics and, strikingly, recommends lower equity allocations to women than to otherwise identical men.
From Crypto to Currency: What Stablecoins Are Doing to Money and Markets
Two recent papers trace the stablecoin transformation from different angles: blockchain data shows stablecoins functioning as tokenized cash, while new causal evidence shows that stablecoin demand shocks are moving Treasury yields, the dollar, and equity markets.
When Attention and Sentiment Turn Micro Shocks into Macro Waves
Two new working papers show that a surprisingly small set of firms can move the whole business cycle: one via concentrated information attention, the other via concentrated business sentiment. Together, they suggest that who is watched and how firms feel may matter as much as conventional macro shocks in driving aggregate fluctuations.
Japan’s Yen as Funding Currency: Debt, Risk and Global Spillovers
This newsletter examines how Japan’s yen‑funded sovereign wealth strategy and the Bank of Japan’s unconventional policies underpin the current devalued yen, sustain high public debt, and transmit shocks to global bond markets.
The Iran War and the U.S. Economy: Growth Resilient, Inflation at Risk
New research offers a nuanced picture of the Iran War’s economic fallout: the U.S. is dramatically less vulnerable to oil shocks than in past decades, but faces meaningful near-term inflation pressures while at the same time, the conflict is testing the long-standing petrodollar architecture.
Fiscal-Monetary Crossroads: Coordination, Heterogeneity, and the 2020s Inflation Story
Two papers from the 2025 RBA Annual Conference examine fiscal-monetary interactions from complementary angles. The first draws on US policy history to argue that coordination alone is not enough. The second uses heterogeneous-agent models to show that fiscal stimulus and interest rate policy are inescapably intertwined, offering fresh insights into the inflation surge of the early 2020s.
The Unfinished Reform of Global Payments
A granular comparison of banks, fintechs, and stablecoin rails finds that cross-border payment costs are driven by market architecture and pricing power. A complementary policy review confirms that fixing this requires more than better technology: it demands interoperability standards, streamlined compliance regimes, and active public-sector coordination across borders.
Stablecoins and the New Monetary Order: Fiscal Risks, Dollar Power, and Global Sovereignty
As dollar-backed stablecoins enter mainstream finance, two new publications sound a cautionary note. One shows they can push sovereign debt higher and amplify Triffin-type instability; the other argues they are strategic instruments of dollar hegemony that threaten the monetary sovereignty of weaker states.
New and Noteworthy Books in Economics (June)
This issue’s reading list circles around one question: what kind of economy do we want, and how do we build it? One book revisits Keynes for lessons for lessons still urgently relevant today. Another charts a path toward an economy built around collective wellbeing. A third examines how financial markets can be better aligned with climate goals. And a fourth reminds us that behind every model and statistic are people whose work and dignity matter.
Ten Years After Brexit: What the Evidence Shows
Two landmark studies published in 2025 and 2026 provide the most comprehensive assessment to date of Brexit’s economic costs. The combined picture shows significant losses in GDP, investment, productivity, and trade, with the damage concentrated in the regulatory and market-access barriers.