Global & Geopolitical Developments

October 10, 2026

New Academic Papers

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Torsten Slok

Partner, Chief Economist

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Here are five new interesting papers that are relevant for the ongoing conversation in markets.

  1. Decoupling Direct Investment: American Firms' Retreat from China
    • The author documents evidence that US-China linkages are declining across channels. New project announcements and US acquisitions of Chinese companies are down, and American multinationals are shrinking their existing operations. Official statistics understate the extent of the retreat because of how much US investment is routed through Hong Kong.
  2. The Early Impacts of AI on Employment among Recent College Graduates
    • Using CPS microdata, the authors analyze the effects of AI on recent college graduate unemployment through August 2026 to argue that AI is still not having a material impact on the US labor market. They find that summer 2026 unemployment trends for recent college graduates follow typical seasonal patterns, and no evidence of any significant displacement of recent college graduates. The authors do find some limited evidence of higher unemployment in telework-focused roles.
  3. The Macroeconomic Effect of AI: Sizing the Software Engineering Channel
    • The authors use stock market returns and Revelio Labs data to estimate a market-implied expectation for AI productivity. Between November 2022 and December 2025, market expectations implied the equivalent of a permanent 32.6% increase in software engineering productivity, worth 3.6% of GDP. By mid-2026, amid rapid improvement in AI coding agents, the estimated effect had more than doubled. I am slightly skeptical how well this is capturing productivity versus some other kind of AI market factor, but I thought this was quite an interesting approach regardless.
  4. Will AI Help or Hurt Work and the Economy? What People Around the World Expect
    • This paper summarizes the findings of a survey of more than 64,000 adults in 32 countries taken in April and May 2026. The surveys finds that workers are considerably more likely to expect AI to help their jobs than to threaten them, in contrast to the narrative in the US about AI-driven job displacement. Survey respondents who expect AI to help anticipate stronger growth and employment, while those who see it as a threat expect weaker employment and higher inflation.
  5. Ratings, Debt, and Deficits: An Exploration
    • The authors compare a simple model of debt sustainability with actual sovereign credit ratings. They find that ratings agencies give far more weight to debt levels than projected fiscal balances, and they rely heavily on country-specific factors. As a result, countries with the same debt and fiscal outlook can receive very different ratings.

Written by Allison Boxer


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