Edward Conard

Top Ten New York Times Bestselling Author

  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

AI Summary. The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.

Claire Bushey Financial Times
Date Posted:
Is Database:
Database

The mean tenure of Boeing engineers has fallen from 16.4 to 12.6 years over the last decade as job cuts and competition from space firms increase; the brain drain is threatening the institutional knowledge needed to design and build a new plane.

Is shorter engineer tenure hurting a planemaker's ability to build new aircraft?

Core argument: The average tenure of a Boeing engineer fell from 16.4 years to 12.6 years over the past decade, according to data from the Society of Professional Engineering Employees in Aerospace, the union representing 12,000 Boeing engineers.

The average tenure of a Boeing engineer has fallen over the past decade from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, the Society of Professional Engineering Employees in Aerospace. Tenure shortened in almost every age bracket, with employees in their 20s and 30s averaging fewer years, as well as those in their late 40s through 65. The risk of this “brain drain”, as analysts, recruiters and union officials have described it, is that it drags on current operations and could make it harder for Boeing to launch its next new plane. “All of this experience is gone,” said Matt Kempf, SPEEA’s senior director for compensation and retirement. That raises concerns because “aerospace engineers aren’t made, they’re grown”. Boeing also held back on announcing a new plane, depriving engineers of a moonshot project to excite imaginations. The last “clean sheet” aeroplane was launched 20 years ago and became the 787.

Takeaways by Macro Roundup® AI

  1. The average tenure of a Boeing engineer fell from 16.4 years to 12.6 years over the past decade, according to data from the Society of Professional Engineering Employees in Aerospace, the union representing 12,000 Boeing engineers.
  2. Boeing engineer tenure shortened in almost every age bracket, including employees in their 20s and 30s and those from their late 40s through 65, according to SPEEA data.
  3. Analysts, recruiters and union officials have described a "brain drain" at Boeing that drags on current operations and could make launching its next new plane harder; Boeing's last "clean sheet" aeroplane was launched 20 years ago and became the 787.

Related Articles:

  • Space: The Missing Element of Your Strategy — Private-sector funding of space-related companies has topped $10bn, close to a tenfold rise over the past decade, though the US government remains the largest source of space funding. If current momentum continues, commercial funding for space ventures could surpass government funding within 20 years.
  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.

AI Summary. A study of 1,993 cities in France, Germany, Italy, Japan, the UK and the US finds former manufacturing hubs lost employment on average after each country's manufacturing peak, though a large share fully recovered. After the peak, hubs with a higher initial share of college-educated workers grew significantly faster.

Luisa Gagliardi, Enrico Moretti and Michel Serafinelli University of California
Date Posted:
Is Database:
Database
Is Important:
Important

Enrico Moretti, Michel Serafinelli and @GagliarL show that, among cities worldwide that were hit by shocks that caused a decline in manufacturing, those that had a high share of college-educated workers recovered faster.

Why do some former manufacturing hubs recover employment while others decline?

Core argument: Across 1,993 cities in France, Germany, Italy, Japan, the UK, and the US, former manufacturing hubs lost employment on average after their country's manufacturing peak, yet a surprisingly large share in each country fully recovered.

We study the employment consequences of deindustrialization for 1,993 cities in six countries: France, Germany, Italy, Japan, the United Kingdom, and the United States. We focus on former manufacturing hubs—defined as Local Labor Markets that in the year of their country’s manufacturing peak have a manufacturing employment share in the top tercile of their country’s distribution. While on average former manufacturing hubs lost employment after their country’s manufacturing peak, a surprisingly large share in each country was able to fully recover. We find that in the two decades before the relevant country’s manufacturing peak, cities with a high share of college-educated workers experienced a similar rate of employment growth as those with a low share of college-educated workers. By contrast, in the decades after the manufacturing peak, the employment trends diverge: cities with a high initial share of college-educated workers experience significantly faster employment growth.

Takeaways by Macro Roundup® AI

  1. Across 1,993 cities in France, Germany, Italy, Japan, the UK, and the US, former manufacturing hubs lost employment on average after their country's manufacturing peak, yet a surprisingly large share in each country fully recovered.
  2. In the two decades before each country's manufacturing peak, cities with high and low shares of college-educated workers grew employment at similar rates, with trends diverging only after the peak.
  3. After their country's manufacturing peak, cities with a high initial share of college-educated workers experienced significantly faster employment growth than those with a low share.

Related Articles:

  • Are Manufacturing Jobs Still Good Jobs? An Exploration of the Manufacturing Wage Premium — Manufacturing average hourly wages, once about 3% above private-sector wages, have grown more slowly than private-sector wages, erasing the manufacturing wage premium for most manufacturing jobs. The authors estimate that declining unionization accounts for more than 70% of that drop, an effect that remains significant after controlling for worker and sector characteristics.
  • Bottlenecks: Sectoral Imbalances and the US Productivity Slowdown — The authors estimate that greater dispersion in productivity growth among an industry's input and idea suppliers has a strong negative effect on that industry's own productivity growth, using data on 462 US manufacturing industries and 42 non-manufacturing industries. Their evidence implies most of the US productivity slowdown can be explained by rising cross-industry variance in productivity growth.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. Adjusted for purchasing power, the EU's GDP is roughly 95% of America's, the same share as a decade earlier, while at market exchange rates US prices went from 5.4% above EU levels to 46% higher, largely because of a strong dollar. GDP per person has still grown faster in America than in most of Western Europe.

Economist Staff The Economist
Date Posted:

Adjusting for purchasing-power parity (PPP) the EU’s GDP is ~ 95% of the US, unchanged over the past decade. GDP per person at PPP has grown faster in the US than in most of the EU, but on a per-hour basis, several EU nations are more productive.

Does Europe's economic gap with America shrink when adjusting for purchasing power?

Core argument: U.S. prices stood just 5.4% above EU prices at market exchange rates in 2012, but the gap has widened to 46%, largely thanks to a strong dollar.

Europe’s economic performance looks far better at PPP than in nominal terms. In 2012 prices in America were just 5.4% higher than in the EU at market exchange rates. Today, the gap is 46%, largely thanks to a strong dollar. Adjusting for PPP, the EU’s GDP is roughly 95% of America’s, the same as it was ten years ago. Still, PPP-adjusted GDP per person has grown faster in America than in most of Western Europe.

Takeaways by Macro Roundup® AI

  1. U.S. prices stood just 5.4% above EU prices at market exchange rates in 2012, but the gap has widened to 46%, largely thanks to a strong dollar.
  2. Adjusted for purchasing power parity, the EU's GDP is roughly 95% of America's, the same share as ten years ago.
  3. PPP-adjusted GDP per person has grown faster in America than in most of Western Europe.

Related Articles:

  • From Strength To Strength — The US produced $25.5tn in GDP, about 25% of the world total—roughly its 1990 share—while China's share stands at 18%; the US share of the G7's nominal GDP rose from 40% in 1990 to 58%. Income per person is now about 30% above western Europe and 54% above Japan, adjusted for purchasing power.
  • Fully Grown – European Vacation! — Europe's growth slowdown reflects a widespread drop in productivity growth rather than changes in physical capital accumulation, with human capital growth also mattering but varying by country. The productivity decline is larger than in the US: in countries such as the UK and France, productivity growth fell from about 2% to near zero or negative.
  • Europe Has Fallen Behind America and the Gap is Growing — The EU economy was somewhat larger than the US in 2008 ($16.2tn versus $14.7tn), but by 2022 the US had grown to $25tn while the EU and UK combined reached only $19.8tn. The dollar's status as the world's reserve currency allows the US to finance its ambitions without unsettling markets.

AI Summary. The authors estimate that greater dispersion in productivity growth among an industry's input and idea suppliers has a strong negative effect on that industry's own productivity growth, using data on 462 US manufacturing industries and 42 non-manufacturing industries. Their evidence implies most of the US productivity slowdown can be explained by rising cross-industry variance in productivity growth.

Daron Acemoglu, David Autor and Christina Patterson National Bureau of Economic Research
Date Posted:

.@DrDaronAcemoglu @davidautor show that declining manufacturing productivity growth since the 1970s can be explained by “bottlenecks” where slowdowns in TFP growth of a sector’s suppliers undermine that sector’s productivity.

Does uneven productivity growth across supplier industries explain the productivity slowdown?

Core argument: The authors estimate that greater dispersion of total factor productivity growth among an industry's input and idea suppliers exerts a powerful negative influence on that industry's own growth opportunities.

The foundational idea of our approach is that innovation in any one industry relies on complementary innovations in—and subsequent productivity gains from—its input and idea suppliers. Our framework yields a simple estimating equation that links growth in sectoral TFP to both the average TFP and the dispersion (variance) of TFP among that sector’s inputs. We estimate this equation using 462 manufacturing industries between 1977 and 2007, and also for the entire US economy between 1987 and 2007 by combining our manufacturing data with 42 non-manufacturing industries. Our estimates indicate that greater dispersion of TFP growth among an industry’s suppliers exerts a powerful negative influence on its own growth opportunities. At face value, our evidence implies that the bulk of the productivity slowdown in the United States (and several other industrialized economies) can be explained by the sizable increase in the cross-industry variance of TFP growth and innovation.

Takeaways by Macro Roundup® AI

  1. The authors estimate that greater dispersion of total factor productivity growth among an industry's input and idea suppliers exerts a powerful negative influence on that industry's own growth opportunities.
  2. The authors' framework links growth in sectoral TFP to both the average TFP and the variance of TFP among a sector's inputs, estimated across 462 manufacturing industries from 1977 to 2007 and the whole US economy from 1987 to 2007 with 42 non-manufacturing industries added.
  3. At face value, the evidence implies that the bulk of the US productivity slowdown, and that of several other industrialized economies, can be explained by the sizable increase in cross-industry variance of TFP growth and innovation.

Related Articles:

AI Summary. Markets and bureaucracies are enormous impersonal distributed systems of information-processing that make use of tacit knowledge no individual brain or government can comprehend, and large language models are another such system rather than something new. The authors argue individual freedom is preserved by setting these systems against one another.

Henry Farrell and Cosma Shalizi The Economist
Date Posted:
Is Database:
Database

.@henryfarrell and Cosma Shalizi argue that free markets and institutional hierarchies were revolutions in human information-processing, and AI can be seen along the same lines.

.@henryfarrell and Cosma Shalizi argue that free markets and institutional hierarchies were revolutions in human...

Are large language models just another impersonal information-processing system like markets?

Core argument: Henry Farrell and Cosma Shalizi argue that artificial intelligence is a familiar-looking monster whose lineage began at least two centuries ago with the industrial revolution, when vast inhuman forces transformed human society.

Artificial intelligence is a familiar-looking monster, say Henry Farrell and Cosma Shalizi [that] began at least two centuries ago with the industrial revolution, when human society was transformed by vast inhuman forces. Markets and bureaucracies seem familiar, but they are actually enormous, impersonal distributed systems of information-processing [with minds of their own]. Economist Friedrich Hayek argued, any complex economy has to somehow make use of a terrifyingly large body of disorganised and informal “tacit knowledge” … [that] no individual brain or government can possibly comprehend. These vast machineries are simply incapable of caring if they crush the powerless or devour the virtuous. The modern world has been built by and within monsters, which crush individuals without remorse or hesitation. We eke out freedom by setting one against another, deploying bureaucracy to limit market excesses, democracy to hold bureaucrats accountable, and markets and bureaucracies to limit democracy’s monstrous tendencies.

Takeaways by Macro Roundup® AI

  1. Henry Farrell and Cosma Shalizi argue that artificial intelligence is a familiar-looking monster whose lineage began at least two centuries ago with the industrial revolution, when vast inhuman forces transformed human society.
  2. Farrell and Shalizi describe markets and bureaucracies as enormous, impersonal distributed information-processing systems with minds of their own, incapable of caring if they crush the powerless or devour the virtuous.
  3. Friedrich Hayek argued that any complex economy must make use of a terrifyingly large body of disorganised, informal "tacit knowledge" that no individual brain or government can comprehend, according to Farrell and Shalizi.

AI Summary. Managers account for 25–35% of the variance in store-level productivity in retail, about 50–70% of the explanatory power of store fixed effects. The authors estimate that moving a manager from the 10th to the 90th percentile raises productivity by 22–82%, equivalent to adding a fifth worker to a team of four.

Robert Metcalfe, Alexandre Sollaci and Chad Syverson National Bureau of Economic Research
Date Posted:
Is Database:
Database

Using evidence from two large retailers @RDMetcalfe @ASollaci @ChadSyverson find that individual managers, outside of firm-wide management practices, explain 25-35% of variance in store level productivity.

How much do managers explain differences in retail store productivity?

Core argument: Managers explain 25–35% of the variance in store-level retail productivity, about 50–70% of the explanatory power of store fixed effects, according to the authors' estimates.

Overall, managers explain between 25 and 35% of the variance of store-level productivity, which is about 50-70% of the explanatory power of store fixed effects. In the four largest connected sets across both companies, moving a manager from the 10th percentile to the 90th percentile increases overall productivity by between 22% and 82%. On average, this implies an effect on output equivalent to adding a fifth employee to a team of four.  We estimate that replacing a manager at the bottom of the distribution by one at the top could increase a store’s productivity by at least 50%, and perhaps as much as doubling it, depending on the company and the relevant connected set. 

Takeaways by Macro Roundup® AI

  1. Managers explain 25–35% of the variance in store-level retail productivity, about 50–70% of the explanatory power of store fixed effects, according to the authors' estimates.
  2. Moving a manager from the 10th to the 90th percentile raises overall productivity by 22–82% across the four largest connected sets in both companies, equivalent on average to adding a fifth employee to a team of four.
  3. The authors estimate that replacing a manager at the bottom of the distribution with one at the top could raise a store's productivity by at least 50%, and perhaps double it, depending on company and connected set.

AI Summary. Foreign sales of listed American and European companies have grown about 2% a year since 2010, down from 8% in the 2000s and 10% in the 1990s. China accounts for less than one-eighth of Western firms' foreign revenues—8% of European companies' total revenues and 4% of American ones—according to Morgan Stanley.

Economist Staff The Economist
Date Posted:

The foreign sales of American firms have grown 2% a year since 2010 relative to 8% annually in the previous decade. American multinational’s sales were flat in China btw 2017-2020 during the same period they grew 6% annually in India. @TheEconomist

Has foreign sales growth slowed for Western companies?

Core argument: Foreign sales of listed American and European companies have grown just 2% a year since 2010, down from 8% in the 2000s and 10% in the 1990s.

Since 2010 the foreign sales of listed American and European companies have grown by a meager 2% per year, down from 8% in the 2000s and 10% in the 1990s. Look across all industries, and China is responsible for less than one-eighth of Western firms’ foreign revenues, according to Morgan Stanley, an investment bank—a much smaller share than American and European sales across the Atlantic or to the rest of the emerging world. Only 8% of European companies’ total revenues come from China. For their American counterparts, the figure is 4%. According to bea figures, American multinationals’ sales in China were flat between 2017 and 2020. In India they grew by 6% a year in the same period. Western multinationals are, then, becoming somewhat less Chinese. Between 1990 and 2021 the average return on equity of American and European listed companies with less than $1bn in sales fell from 8% to 4%. That for firms with revenues of $10bn or more rose from 12% to 18%. And being big is easier if you are international. In 2021 American and European listed companies with $10bn-plus in revenue generated 43% of their sales abroad on average, compared with just 32% for those with sales below $1bn. Global reach is, in other words, more important than ever.

Takeaways by Macro Roundup® AI

  1. Foreign sales of listed American and European companies have grown just 2% a year since 2010, down from 8% in the 2000s and 10% in the 1990s.
  2. China accounts for less than one-eighth of Western firms' foreign revenues, according to Morgan Stanley, supplying 8% of European companies' total revenues and 4% of American companies'.
  3. Average return on equity for American and European listed firms with $10bn-plus in sales rose from 12% in 1990 to 18% in 2021, while that for firms under $1bn fell from 8% to 4%.

AI Summary. The World Management Survey, based on over 20,000 interviews with medium-sized firms, hospitals, and schools across 35 rich and emerging economies, finds large differences in management practices between countries that persist across borders. Multinationals score higher than domestic firms wherever they locate, managing foreign offices to their home-country standard.

Economist Staff The Economist
Date Posted:

.@TheEconomist cites World Management Survey data showing that American firms are better managed than their peers. @I_Am_NickBloom and @johnvanreenan argue that half of the productivity gap btw Britain and US can be attributed to poor management.

Do management practices differ across countries and persist across borders?

Core argument: The World Management Survey, run by John Van Reenen and Nicholas Bloom since 2003, has conducted over 20,000 interviews with medium-sized firms, hospitals, and schools across 35 countries, spanning both rich and emerging economies.

Since 2003 John Van Reenen and Nicholas Bloom have been developing and running the World Management Survey (WMS). To date, the WMS has carried out over 20,000 interviews with medium-sized firms, hospitals, and schools in 35 countries, some rich economies, and others emerging markets. The results allow for a ranking of countries based on differences in their firms’ management practices. Such differences are not just large; they also persist across borders. Among the WMS’s findings is the fact that companies’ offices abroad tend to be managed as well as those in their home country, meaning that the London branch of an American business, say, will typically be managed to the same standard as its offices in New York or Chicago. (Multinationals achieve higher management scores than domestic firms wherever they locate.)

Takeaways by Macro Roundup® AI

  1. The World Management Survey, run by John Van Reenen and Nicholas Bloom since 2003, has conducted over 20,000 interviews with medium-sized firms, hospitals, and schools across 35 countries, spanning both rich and emerging economies.
  2. The World Management Survey finds differences in firms' management practices across countries are large and persist across borders, allowing countries to be ranked by their firms' management practices.
  3. Companies' foreign offices tend to be managed as well as those at home, so the London branch of an American business typically matches its New York or Chicago standard, with multinationals scoring higher than domestic firms wherever they locate.