This speech by the Head of Research at the BIS gives an accessible overview of why covered interest parity no longer holds and reinforces the importance of the Circular Flow of Dollars, discussed in Chapter 2 of The Rise of Carry. The paper contains references to more detailed academic papers for those interested in going deeper.
Shin, Hyun Song. Speech to London School of Economics and Political Science. November 2016.
Read the speech here: https://www.bis.org/speeches/sp161115.pdf