“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“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
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
AI Summary.The six largest US banks by assets — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — added $600bn in combined market value to reach $2.37tn, spurred by a deregulation push and a revival in investment banking. Europe's six most valuable banks are worth about $1tn combined.
Joshua FranklinFinancial Times
Date Posted:
The market cap of the six largest American banks rose $600B in 2025 to $2.37T – more than double that of their European peers – as investors bet on deregulation, such as allowing higher leverage and less onerous Basel III Endgame rules.
Has deregulation boosted the market value of large US banks?
Core argument: The six largest US banks by assets added $600bn in market value in 2025, with combined market capitalisation rising to $2.37tn from $1.77tn at the end of last year, according to S&P Global data.
America’s six largest banks added $600bn in market value in 2025, spurred on by the Trump administration’s push to deregulate the industry and a revival in investment banking. The collective market capitalisation of the six biggest US banks by assets — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — rose to $2.37tn at the close of business on Tuesday, up from $1.77tn at the end of last year, according to data from S&P Global. The six most valuable European banks have a market capitalisation of just $1tn combined, highlighting the gap that has opened since the financial crisis between US banks and their European rivals. The US banks are on track to outperform the broader S&P 500 for the second year in a row.
Takeaways by Macro Roundup® AI
The six largest US banks by assets added $600bn in market value in 2025, with combined market capitalisation rising to $2.37tn from $1.77tn at the end of last year, according to S&P Global data.
Gains at JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley were spurred on by the Trump administration's push to deregulate the industry and a revival in investment banking.
The six most valuable European banks have a combined market capitalisation of $1tn, while the six biggest US banks are on track to outperform the broader S&P 500 for the second year in a row.
Related Articles:
Goosing Credit Supply— Faster loan growth at lightly regulated smaller banks, credit unions, and private credit compared with large banks suggests post-2008 rules that raised capital and liquid-asset requirements with bank size have constrained large-bank lending. With loan growth currently limited more by demand than supply, easing large-bank requirements may mainly shift existing loans toward large banks.
The Secular Decline of Bank Balance Sheet Lending— Traditional bank balance sheet lending has declined as a share of credit intermediation, with credit increasingly channeled through arms-length transactions such as securitization. A structural model attributes falling lending shares to lower securitization costs, savers' behavior driving bank balance sheet size, and implicit bank costs and subsidies shaping balance sheet composition.
Europe’s Financial Sector is a Drag— Europe's fragmented financial sector struggles to supply enough capital and liquidity to support European companies and economic growth, with the gap between US and European financial sectors widening since the 2008-2009 crisis. The total market value of European banks fell from $2.7tn to $1.4tn, while US bank market value rose from $1.6tn to $2.6tn.
AI Summary.Small, often invisible national and EU regulatory barriers persist within the European Union's single market for goods, such as overlapping labelling requirements that produce a 20cm label on a 12cm toy. The International Monetary Fund estimates these internal barriers act as a drag equivalent to a 44% tariff on Europe's economy.
Richard Milne and Sam JoinerFinancial Times
Date Posted:
French and EU regulations require a 20cm label on a 12cm €2 toy elephant. The IMF estimates that such “small, often invisible barriers to trade, taken together,” amount to “a drag on Europe’s economy equivalent to a tariff of 44%.”
How costly are hidden regulatory barriers within Europe's single market?
Core argument: The IMF estimates that remaining small, often invisible barriers to trade within the EU single market for goods amount to a drag on Europe's economy equivalent to a tariff of 44%.
If there is one product that symbolises the absurdities of the EU’s single market in goods, it might be a cuddly elephant. The Djungelskog toy from Ikea may only be 12cm tall and cost less than €2, but it has a 20cm-long label protruding from its behind. Environmental rules from France and EU textile legislation account for much of the length. But the elongated label reflects a strategic, even a philosophical, problem for Europe as its companies battle to compete globally. The single market in goods should be the EU’s crowning achievement. Compared with free movement of people, services or capital, it is the area that has come furthest in more than 30 years since the common market was established. Yet there remain small, often invisible barriers to trade that, taken together, amount to what the IMF estimates is a drag on Europe’s economy equivalent to a tariff of 44%.
Takeaways by Macro Roundup® AI
The IMF estimates that remaining small, often invisible barriers to trade within the EU single market for goods amount to a drag on Europe's economy equivalent to a tariff of 44%.
Ikea's Djungelskog toy elephant, 12cm tall and costing less than €2, carries a 20cm label whose length is largely accounted for by French environmental rules and EU textile legislation.
The EU's single market in goods has advanced further than free movement of people, services or capital in the more than 30 years since the common market was established.
Related Articles:
The Future of European Competitiveness – A Competitiveness Strategy for Europe— A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
Forget the US — Europe has Successfully Put Tariffs on Itself— The International Monetary Fund estimates Europe's internal barriers are equivalent to tariffs of 45% on manufacturing and 110% on services, leaving trade across European Union countries at less than half the level of trade across US states. Regulation of digital services is estimated to have cut profits for small European tech firms by up to 12%.
Europe Regulates Its Way to Last Place— Europe's regulators tend to act on the mere possibility of harm rather than evidence of it, an approach that can throttle innovation early. The McKinsey Global Institute found that among companies with over $1bn in revenue, U.S. firms spent 80% more on research and development, had 30% higher return on capital, and grew revenue 1.3 percentage points faster.
AI Summary.A study of 84,985 mergers reported to U.S. antitrust agencies, of which 1,477 were challenged in court, finds that the likelihood agencies win fully litigated cases and the likelihood challenged mergers proceed to litigation both increased following the Chicago School's influence. The authors read this as a shift toward stricter judicial enforcement standards.
Mark JamisonAmerican Enterprise Institute
Date Posted:
Is Database:
Database
@drj_policy @AEI argues that from 1982–2021 antitrust enforcement standards “have become more pro-enforcement—exactly the opposite of the accepted wisdom.”
Has merger enforcement actually become stricter in the courts?
Core argument: Of 84,985 mergers reported to U.S. antitrust agencies from 1982 to 2021 under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, the agencies challenged 1,477 by petitioning a court to stop the merger, according to the study.
The new study systematically analyzed the evolution of judicial standards for proposed mergers and found that the Chicago School in fact upgraded antitrust enforcement. The study examined 84,985 mergers reported to the agencies from 1982 to 2021 under the Hart-Scott-Rodino Antitrust Improvement Act of 1976. The agencies challenged 1,477 mergers, meaning that one of the agencies petitioned a court to stop the merger. The study found that the likelihood that agencies would win fully litigated cases rose since the Chicago School’s influence. It also found that the likelihood of challenged mergers proceeding to litigation increased. Both findings indicate a shift towards stricter enforcement standards in the courts. The study’s findings are consistent with those of an earlier study by some of the same authors. This earlier study found that the intensity of merger challenges increased from 1979 to 2017 and that the rising enforcement did not depend on who was in the White House.
Takeaways by Macro Roundup® AI
Of 84,985 mergers reported to U.S. antitrust agencies from 1982 to 2021 under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, the agencies challenged 1,477 by petitioning a court to stop the merger, according to the study.
The study found that the likelihood agencies would win fully litigated merger cases rose since the Chicago School's influence and that challenged mergers became more likely to proceed to litigation, indicating a shift toward stricter enforcement standards in the courts.
An earlier study by some of the same authors found that the intensity of merger challenges increased from 1979 to 2017 and that the rising enforcement did not depend on who was in the White House.
Related Articles:
Trends in Competition in the United States: What Does the Evidence Show?— The authors argue the ratio of price to marginal cost, not market concentration, is the meaningful measure of market power. U.S. corporate pretax profits rose from 8.6% of GDP in the 1990s to 11.9% in the 2010s, but domestic profits were far flatter, with much of the gain from foreign operations.
The Economics of Inequality in High-Wage Economies— Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.
Has Market Concentration in U.S. Manufacturing Increased?— Measuring U.S. manufacturing concentration by domestic production alone shows the top 20 firms' share rising, but including imports and excluding exports leaves the top 20 firms' share of total U.S. sales flat. The authors argue the falling market share of U.S. firms suggests their market power may have declined.
AI Summary.Europe's regulators tend to act on the mere possibility of harm rather than evidence of it, an approach that can throttle innovation early. The McKinsey Global Institute found that among companies with over $1bn in revenue, U.S. firms spent 80% more on research and development, had 30% higher return on capital, and grew revenue 1.3 percentage points faster.
Greg IpWall Street Journal
Date Posted:
European firms with at least $1B in revenue spent 3.7% of revenue on R&D vs. 6.8% for comparable US firms, and earned 14% ROIC vs. 17.8% for US firms. @greg_ip points to European competition policy as a driver.
Does regulating against possible harm leave Europe behind on innovation?
Core argument: The McKinsey Global Institute found that among companies with more than $1 billion in revenue, U.S. firms spent 80% more on research and development, earned 30% higher return on capital, and grew revenue 1.3 percentage points faster than European peers.
Europe’s economy underperforms for lots of reasons, from demographics to energy costs, not just regulation. And U.S. regulators aren’t exactly hands-off. Still, they tend to act on evidence of harm, whereas Europe’s will act on the mere possibility. This precautionary principle can throttle innovation in its cradle. The McKinsey Global Institute noted Europe’s internal market is larger than China’s and almost as big as the U.S.’s. But when it compared companies with more than $1 billion in revenue, the U.S. firms spent 80% more on research and development, boasted 30% higher return on capital, and 1.3-percentage points faster revenue growth.
Takeaways by Macro Roundup® AI
The McKinsey Global Institute found that among companies with more than $1 billion in revenue, U.S. firms spent 80% more on research and development, earned 30% higher return on capital, and grew revenue 1.3 percentage points faster than European peers.
Europe's internal market is larger than China's and almost as big as the U.S.'s, according to the McKinsey Global Institute, yet Europe's economy underperforms for reasons ranging from demographics to energy costs, not regulation alone.
European regulators act on the mere possibility of harm while U.S. regulators tend to act on evidence of harm, and this precautionary principle can throttle innovation in its cradle.
Related Articles:
EU’s New AI Act Risks Hampering Innovation, Warns Emmanuel Macron— France has warned that the European Union's new artificial intelligence law would impose the world's toughest regime on the foundation models underpinning generative AI products and risk hampering innovation. The rules impose transparency requirements on powerful AI models, restrict facial recognition, and prohibit "social scoring" of people based on behavior or personal characteristics.
Attenuating Innovation (AI)— AI regulation locks in incumbents, and the early AI winners promoting alarm in Washington about AI risks are engaged in regulatory capture, seeking rules that hobble future competitors while continuing their own development. Such an executive order is proscriptive rather than adaptive and presumes knowledge of an unknowable future.
Erik Brynjolfsson: ‘This Could Be The Best Decade in History — Or The Worst’— Studies of large language models across tasks including software coding, consulting, and writing find double-digit productivity gains appearing within months, with less-skilled workers typically benefiting most. Given the large share of modern work these tools can augment, the author projects US productivity growth near 3% annually in the 2020s, roughly double the Congressional Budget Office's 1.4% projection.
AI Summary.Germany built a liquefied natural gas import terminal in months rather than the five years such projects normally require, with the first tanker expected to arrive once the facility is complete. The terminal will be operated by utility Uniper, which the German state agreed to nationalize.
Georgi KantchevWall Street Journal
Date Posted:
LNG import facilities in Germany are on schedule to be operational within a year, a process that usually would take five. @WSJ
Can a gas import terminal be built in months instead of years?
Core argument: Germany's government asked energy companies in March whether an LNG import terminal, normally requiring at least five years to build, could be erected in a port town by year's end.
In March, the German government asked energy companies to weigh a seemingly impossible engineering task. Could a new liquefied natural gas import terminal, which normally takes at least five years to build, be erected in this port town by year’s end? At the headquarters of the company asked to build the pipeline portion, technical director Thomas Hüwener posed that question to his team. “If no, then it’s a no,” he told them. “If yes, then we have to commit, with all the possible consequences for our company.” After three days of deliberations, the company concluded that if everything went perfectly, the project could be done by Christmas. Utility Uniper SE, which the German state recently agreed to nationalize and which will operate the terminal, said that if all goes according to plan, the first tanker carrying LNG will arrive at the start of next year.
Takeaways by Macro Roundup® AI
Germany's government asked energy companies in March whether an LNG import terminal, normally requiring at least five years to build, could be erected in a port town by year's end.
The company asked to build the pipeline portion concluded after three days of deliberation that the project could be done by Christmas if everything went perfectly, with technical director Thomas Hüwener citing possible consequences for the company.
Uniper SE, which the German state agreed to nationalize and which will operate the terminal, said the first tanker carrying LNG will arrive at the start of next year if all goes according to plan.
AI Summary.US regulators approved what would be the nation's largest oil export terminal, off the Texas Gulf Coast, adding 2m barrels per day of export capacity. It is the first of four proposed offshore Texas terminals to win approval and would support continued growth in US shale production, working against goals for deep carbon emission cuts.
Dylan BaddourThe Texas Tribune
Date Posted:
The Biden administration has approved the largest oil export facility in American history. The facility will expand export capacity by 2 million barrels per day, vs. 2021 average exports of 8.5 million barrels per day. @TexasTribune
Does approving the largest US oil export terminal conflict with emissions goals?
Core argument: The Biden administration approved the nation's largest oil export terminal off the Gulf Coast of Texas, which would add 2 million barrels per day to US oil export capacity.
The Biden administration has approved plans to build the nation’s largest oil export terminal off the Gulf Coast of Texas, which would add 2 million barrels per day to the US oil export capacity. The administration’s move marked a major step forward for the export sector. The offshore oil export terminal, the first to be approved of four proposed along Texas’s Gulf Coast, will enable continued growth in US shale oil production and global consumption, dealing a substantial setback to the White House’s goals for drastic cuts in carbon emissions by the year 2030.
Takeaways by Macro Roundup® AI
The Biden administration approved the nation's largest oil export terminal off the Gulf Coast of Texas, which would add 2 million barrels per day to US oil export capacity.
The project is the first of four proposed offshore oil export terminals along Texas's Gulf Coast to win approval, marking a major step forward for the export sector.
The terminal is expected to enable continued growth in US shale oil production and global consumption, setting back the White House's goals for deep carbon emissions cuts by 2030.
AI Summary.The authors estimate that labor devoted to regulatory compliance accounts for an average 1.34% of a firm's total wage bill in the United States, varying substantially across and within industries and increasing over time. They find an inverted-U relationship with size, with compliance spending shares peaking at establishments of about 500 employees.
Francesco Trebbi and Miao Ben ZhangNational Bureau Of Economic Research
Date Posted:
Between 2002 and 2014, regulatory costs averaged 1.34% of firms’ wage bills in the United States @xftrebbi @rainozhang @NBER
How much of firms' wage bills goes to regulatory compliance?
Core argument: Regulatory compliance accounts on average for 1.34% of a firm's total wage bill over 2002–2014, with substantial variation across and within industries and an increase over time, the authors estimate.
We quantify firms’ regulation compliance costs from 2002 to 2014 in terms of their labor input expenditure to comply with government rules. Detailed establishment-level occupation data, in combination with occupation-specific task information, allow us to recover the share of an establishment’s wage bill owing to employees engaged in regulatory compliance. Regulatory costs account, on average, for 1.34% of the total wage bill of a firm but vary substantially across and within industries and have increased over time. We investigate the returns to scale in regulatory compliance and find an inverted-U shape, with the percentage of regulatory spending peaking for an establishment size of around 500 employees.
Takeaways by Macro Roundup® AI
Regulatory compliance accounts on average for 1.34% of a firm's total wage bill over 2002–2014, with substantial variation across and within industries and an increase over time, the authors estimate.
The authors find an inverted-U relationship between establishment size and compliance burden, with the share of the wage bill spent on regulatory compliance peaking at roughly 500 employees.
The authors measure compliance costs by combining establishment-level occupation data with occupation-specific task information to recover the share of an establishment's wage bill owing to employees engaged in regulatory compliance.
AI Summary.The US Federal Communications Commission has barred Chinese telecommunications companies Huawei and ZTE from selling equipment in the US, citing national security concerns. The ban covers network base station equipment, phones, cameras, WiFi routers, and rebranded "white label" products.
James PolitiFinancial Times
Date Posted:
The FCC has banned China-based Huawei and ZTE from telecommunications sales into the American market, citing national security concerns. The move may further fuel tensions with Beijing. @ft
Are Chinese telecom makers barred from selling equipment in the US?
Core argument: The Federal Communications Commission barred China-based Huawei and ZTE from selling telecommunications equipment in the US, citing national security concerns in a move that could further fuel tensions with Beijing.
Washington’s top telecommunications regulator has barred China-based Huawei and ZTE from selling equipment in the US, citing national security concerns in a move that could further fuel tensions with Beijing. The Federal Communications Commission announced the step on Friday, saying it was the latest effort by US authorities to “build a more secure and resilient supply chain” in the telecommunications industry. “The action we take today covers base station equipment that goes into our networks. It covers phones, cameras, and WiFi routers that go into our homes. And it covers rebranded or ‘white label’ equipment that is developed for the marketplace. In other words, this approach is comprehensive,” said Jessica Rosenworcel, chair of the FCC.
Takeaways by Macro Roundup® AI
The Federal Communications Commission barred China-based Huawei and ZTE from selling telecommunications equipment in the US, citing national security concerns in a move that could further fuel tensions with Beijing.
FCC chair Jessica Rosenworcel said the approach is comprehensive, covering network base station equipment, phones, cameras, WiFi routers, and rebranded or "white label" equipment developed for the marketplace.
The FCC described the action as the latest effort by US authorities to "build a more secure and resilient supply chain" in the telecommunications industry.
