“…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
AI Summary.Domestic migration has historically added about 0.5% a year to the population of reliably Republican counties while reliably Democratic counties lost 0.6%, with international migration showing the reverse pattern. Internal Revenue Service data show the fastest-growing Republican counties draw many newcomers from Democratic and competitive areas, and Republican support in those faster-growing counties has weakened.
Economist StaffThe Economist
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An Economist analysis of more than 3,000 US counties finds that in reliably GOP counties, annual deaths now exceed births by 0.4 per 1k residents, while in reliably Democratic counties, births exceed deaths by 2.8 per 1k. Population growth in the GOP counties is largely driven by internal migration.
How is domestic migration reshaping politics in Republican counties?
Core argument: Domestic migration has historically added about 0.5% a year to the population of reliably Republican counties while subtracting 0.6% a year from reliably Democratic ones.
Our number crunching shows that domestic migration has historically boosted the population of reliably Republican counties by about 0.5% a year, while reliably Democratic ones have lost 0.6%. The opposite is true of international migration, which has historically added 0.5% a year to solid-blue counties, compared with just 0.1% in solid-red ones. Data from the IRS show that the fastest-growing red counties draw an unusually large share of newcomers from politically unfriendly territory. In 2022-23 more than 20% came from solid-blue places and around 40% from competitive ones. This may already be affecting voting patterns. Before 2016, fast-growing red counties leaned more Republican than slower-growing ones. That has now flipped: slower-growing red counties lean more Republican, and GOP support in faster-growing ones has weakened.
Takeaways by Macro Roundup® AI
Domestic migration has historically added about 0.5% a year to the population of reliably Republican counties while subtracting 0.6% a year from reliably Democratic ones.
International migration has historically added about 0.5% a year to solid-blue counties versus just 0.1% in solid-red ones, reversing the pattern of domestic migration.
Internal Revenue Service data show that in 2022-23 more than 20% of newcomers to the fastest-growing red counties came from solid-blue places and around 40% from competitive ones.
Related Articles:
Where Americans Choose to Move and Where They Leave— County-level mapping of net domestic migration within the United States shows some counties gained net movers equal to 10% or more of their 2020 population while others lost an equivalent share, excluding international moves.
Americans Are Done With Being Put in Racial Boxes— Immigration from Asia and Latin America has been the chief driver of rising US diversity and the declining non-Hispanic White share of the population. Intermarriage across racial and ethnic lines is far more common among Hispanic and Asian Americans, and rising among Black and non-Hispanic White Americans, leaving more people outside single racial categories.
The Great “Transfer”-mation— Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
AI Summary.U.S. survey data on high school students show the share of 9th graders identifying as lesbian, gay, or bisexual fell from 17% to 11% over two years, compared with a decline from 18% to 16% among 12th graders. The drop was concentrated among girls, from 27% to 22%, versus 9% to 7% among boys.
Jean TwengeGeneration Tech
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Among US high-school students, the LGB share fell btw 2023 to 2025 by 5pp for girls (27% to 22%), and 2pp for boys (9% to 7%). The preceding rise was likewise larger for girls: +128% from 2015 to 2021, versus +99% for boys to 2023.
Are younger teens less likely to identify as lesbian, gay, or bisexual?
Core argument: The share of U.S. 9th graders identifying as lesbian, gay, or bisexual fell from 17% in 2023 to 11% in 2025 in the CDC’s Youth Risk Behavior Survey, while 12th graders declined from 18% to 16%.
[New data from the Youth Risk Survey of U.S. 9th to 12th graders from the CDC shows] for 12th graders, 17 and 18 years old, identifying as LGB declines only a few percentage points between 2023 and 2025 (from 18% to 16%). But the headline result is for 9th graders (14 and 15 years old): Identifying as LGB absolutely plummets between 2023 and 2025, from 17% to 11%. That really does look like a free fall. The decline appears to be driven almost entirely by girls. Identifying as LGB dropped from 27% in 2023 to 22% in 2025 among girls, and from 9% to 7% among boys. [In terms of the share of high school students reporting engaging in same-sex activity] most high school students are not sexually active, so this is only a subsample of the larger group. For boys, there’s been a fairly steady rise in same-sex partners, not too different from the pattern of identifying as LGB among boys. The story is different for girls, where having non-heterosexual sex peaked in 2021 and then fell steeply.
Takeaways by Macro Roundup® AI
The share of U.S. 9th graders identifying as lesbian, gay, or bisexual fell from 17% in 2023 to 11% in 2025 in the CDC’s Youth Risk Behavior Survey, while 12th graders declined from 18% to 16%.
The decline appears driven almost entirely by girls, whose LGB identification fell from 27% in 2023 to 22% in 2025, compared with a drop from 9% to 7% among boys.
Among sexually active teens, the share of boys reporting at least one same-sex partner has risen fairly steadily, while for girls it peaked in 2021 and then fell steeply.
Related Articles:
Is There Really a Generational Difference in Identifying as Lesbian, Gay, or Bisexual?— General Social Survey data show that increases among young American adults appear in same-sex sexual behavior as well as in identification, with 20% reporting a same-sex partner versus 18.5% identifying as lesbian, gay, or bisexual. The increases are larger among 27- to 41-year-olds.
Teens Used To Be Happier. What Changed?— The share of US high school seniors describing themselves as "very happy" peaked at 24.8% and remained around 24.4% before falling to 11.4% at its low, recovering only to 12.7%, well below the 17.9% recorded before the pandemic. The decline coincided with smartphones and social media becoming pervasive.
US College Students’ Well-Being— A study of US college students finds moderate-to-severe depression reported by 26% of students at one elite institution, 22% reporting moderate-to-severe anxiety and 10% contemplating suicide. Poorer mental health is associated with being female, little exercise, low grades, and financial aid; financial stress is associated with higher suicidal thoughts.
AI Summary.An expanded unemployment measure for young college graduates — including those outside the labor force who report wanting a job — averaged 10.4% in the most recent summer, the highest of the five summers compared and 0.3 percentage points above the prior high. Estimated associations with occupational AI exposure are positive but not statistically significant.
Robert Fairlie and Jane WuNational Bureau of Economic Research
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For American college graduates aged 22 to 25 and not in school, summer unemployment was 7.3% in 2026, versus 7.1%, 6.3%, 7.8%, and 7.2% in 2022–25. These are ordinary seasonal peaks, with no evidence of an upward trend. A broader measure tells a similar story.
Is AI raising unemployment among recent college graduates?
Core argument: On the expanded unemployment measure including “sidelined” young college graduates, the June–August average was 10.4% in 2026, compared with 9.4% in 2022, 9.3% in 2023, 10.1% in 2024 and 9.4% in 2025.
Figure 2b displays the seasonal comparison for our expanded unemployment measure, which includes young college graduates who are “sidelined,” those not officially defined as being in the labor force but nonetheless report “wanting a job.” Averaging over June, July and August, the expanded measure was 10.4% in 2026, compared with 9.4% in 2022, 9.3% in 2023, 10.1% in 2024 and 9.4% in 2025. Summer 2026 is the highest of the five summers under this definition, although it exceeds the previous high by only 0.3 percentage points. The expanded measure thus indicates a larger increase relative to 2025, while also showing that high rates in the summer are not unique to 2026. The coefficient estimates of interactions between summer 2026 and both measures of occupational AI exposure are positive, but not statistically significant. The point estimate of the interaction with occupational teleworkability is positive but difficult to separate cleanly from AI exposure (Tables 4-6).
Takeaways by Macro Roundup® AI
On the expanded unemployment measure including “sidelined” young college graduates, the June–August average was 10.4% in 2026, compared with 9.4% in 2022, 9.3% in 2023, 10.1% in 2024 and 9.4% in 2025.
Summer 2026 is the highest of the five summers on the expanded measure but exceeds the prior high by only 0.3 percentage points, indicating high summer rates are not unique to 2026.
Coefficient estimates of interactions between summer 2026 and both measures of occupational AI exposure are positive but not statistically significant, and the positive point estimate for occupational teleworkability is difficult to separate cleanly from AI exposure.
Related Articles:
Graduating into Disruption: Labor Market Outcomes for AI-Exposed College Majors— College graduates in the majors most exposed to artificial intelligence show statistically significant employment declines following the arrival of AI chatbots, with the most-exposed 10% of majors down about 5 percentage points and the seventh and eighth deciles down about 2 points. The authors note flat pre-2020 trends and precise timing argue against alternative explanations such as uneven post-pandemic recovery.
The Jobs Apocalypse Is Postponed. An AI Jobs Boom Is Here— Employment in five industries tied to the data-centre build-out, including electrical contracting and equipment manufacturing, has risen roughly 320,000 above what broader construction and manufacturing trends would suggest. Engineers, software developers, mathematicians and data scientists have added about 730,000 jobs above the trend for professional employment overall.
Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence— Employment for workers aged 22–25 in the occupations most exposed to artificial intelligence has declined roughly 18pp relative to less-exposed peers, with no comparable decline in other age groups. The authors find this operates mainly through reduced hiring, concentrated where AI substitutes for human tasks rather than complements them.
AI Summary.Racial disparities in US crime, arrest, and prison admission rates have declined across offence types, driven by reductions among Black Americans. Black-White disparity in drug-offence prison admissions fell from 12x to 2.9x, attributable to a 75% drop in the Black drug admission rate, while declines for violent and property offences were smaller.
Jason Robey and Michael LightNature Human Behaviour
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From their respective recent peaks in 2000 and 2006 to 2019, prison admissions for violent crime fell 20% for Whites and 43% for Blacks. Race-specific NIBRS estimates suggest actual violent crime fell 18% and 47%, respectively.
Why are racial gaps in US arrests and imprisonment narrowing?
Core argument: Black–White disparity in drug-offence prison admission rates fell from 12 to 1 in 2000 to 2.9 to 1 in 2019, attributed almost entirely to a 75% drop in the Black prison admission rate for drug offences.
From their respective peaks [2000 for whites, 2006 for blacks], prison admission rates for violent crime fell 20% for Whites and 43% for Blacks. [Because UCR crime totals do not identify offender race, the authors use the National Incident-Based Reporting System (NIBRS), which records offender race as reported by victims, witnesses or police, to allocate national violent-crime totals by race. NIBRS contains about three times as many violent offenders as arrestees. As a check on crimes not reported to police, they use National Crime Victimization Survey victim reports; results are similar.] [Recorded violent crime fell 18% for Whites and 47% for Blacks See Table 2]. For Whites, the decline in prison admissions is primarily a function of a decline in crime and arrests, with case processing dampening the decline. For Blacks, the decline in violent prison admissions is exclusively attributed to a 47% reduction in violent crime, as policing and case processing trends worked against an otherwise larger decline. [Arrests per crime and prison admissions per arrest both rose slightly; See Table 2].
Takeaways by Macro Roundup® AI
Black–White disparity in drug-offence prison admission rates fell from 12 to 1 in 2000 to 2.9 to 1 in 2019, attributed almost entirely to a 75% drop in the Black prison admission rate for drug offences.
Racial disparities in crime, arrest, and prison admission rates have declined across all offence types since about 2000, largely attributable to reductions in crime, arrests, and imprisonment among Blacks.
Declining drug admissions accounted for 53% of the overall drop in Black prison admission rates, while for Whites 62% of the decline came from property offences, with violent (20%) and drug (19%) admissions contributing roughly equally.
Related Articles:
America’s Incarceration Rate Is About To Fall Off A Cliff— The U.S. imprisonment rate stayed below 120 per 100,000 people from the end of World War II until the mid-1970s, then doubled by 1985 and grew about 8% a year, passing 1m prisoners in 1994 and peaking in 2009 — 18 years after violent crime peaked.
Number of Young People Accused of Serious Crimes Surges in New York City— New York City Police Department figures show 4,858 major crimes with a minor accused or arrested in the most recent year, up 37% from 3,543 seven years earlier, with robberies and felony assaults continuing to rise. Police officials attribute the increase to a state law diverting most 16- and 17-year-old defendants from adult courts.
How Many Are Criminals— In the United States, between one in four and one in three Black men eventually serve prison time, compared with one in seven Hispanic men and roughly one in fifteen non-Hispanic white men. In Denmark, about 9% of men of Danish origin and 27% of men of non-Western origin have a criminal conviction by age 24.
AI Summary.An analysis of authors at a leading AI research conference finds China is the largest originating source of elite AI talent, with its share of researchers holding Chinese undergraduate degrees rising 11 percentage points to 57%, while the US share fell to 13%. The US remains a net importer of AI researchers, gaining 2,145 while China lost 1,729.
Damien Ma and Binyi YangCarnegie Endowment for International Peace
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Surveying education/employment histories of authors at the Neural Information Processing Systems conference, Ma and Yang infer China educated 57% of elite AI talent as of 2025, versus 13% for the US. Yet the US gained 2,145 researchers y/y while China lost 1,729.
Does China produce the most elite AI talent while America attracts it?
Core argument: Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.
[Using a methodology based on paper authors from the Neural Information Processing Systems conference (NeurIPS) Damien Ma and Binyi Yang find] China has established a commanding lead as the largest originating source of elite AI talent globally. Compared to 2022, the share of Chinese-origin AI talent, defined as those who received undergraduate degrees in China, increased 11 percentage points to 57% in 2025, while the U.S. share fell to 13%. The United States remains a magnet for global AI talent, particularly Chinese talent. Despite U.S.-China tensions, among AI researchers working in the United States, the 2025 share of those holding undergraduate degrees from China rose by 4 percentage points. When it comes to brain gain vs. brain drain, the United States saw a net gain of +2,145 researchers in 2025 while China registered a net loss of -1,729 researchers.
Takeaways by Macro Roundup® AI
Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.
Among AI researchers working in the United States, the share holding Chinese undergraduate degrees rose 4 percentage points in 2025, despite U.S.-China tensions.
The United States recorded a net gain of 2,145 AI researchers in 2025, while China registered a net loss of 1,729, under Ma and Yang’s methodology based on NeurIPS paper authors.
Related Articles:
China Lures Home Its Top AI Talent From Silicon Valley— Elite artificial intelligence researchers have left US firms including Google DeepMind and OpenAI for Chinese companies such as ByteDance, Tencent, and Alibaba. Three China- and San Francisco-based headhunters say they relocated more than 30 US-based researchers to China over 12 months, up from low single digits the prior year.
China and the Future Of Science— China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.
Why Europe Produces Nobel Prize Winners but Not Elon Musks— Europe trains more engineering graduates per capita than China and more STEM PhDs than any region outside the United States, yet the only EU-born companies to reach $100bn market value in the past fifty years, Spotify and BioNTech, listed on US exchanges. Europe captures 6% of global AI startup funding versus 61% for the United States.
AI Summary.China's urban unemployment rate for 16- to 24-year-olds excluding students reached 18.9%, the highest since the statistics agency revised its methodology to exclude students. A record influx of university graduates is entering a job market weighed down by weak domestic demand and growing adoption of artificial intelligence.
Xinyi WuSouth China Morning Post
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China’s youth unemployment (16–24) climbed to 18.9% in August, a level which it had previously hit last summer. 12.7 million new university graduates entered the workforce this summer, ~4% more than last year.
Is a record wave of graduates pushing China's youth unemployment higher?
Core argument: China’s urban unemployment rate for 16–24-year-olds excluding students rose to 18.9% in August from 17.9% in July, according to the National Bureau of Statistics.
China’s urban youth unemployment rose last month, as a record influx of university graduates struggles to find work in a job market weighed down by weak domestic demand and the growing adoption of artificial intelligence. The jobless rate for those aged 16 to 24, excluding students, rose to 18.9% in August from 17.9% in July, according to data released by the National Bureau of Statistics. This figure, as well as the identical number from August last year, represents the highest reading since Beijing revised its calculation methodology to exclude students in 2023, following a peak of 21.3% under the old rubric reported in June of that year.
Takeaways by Macro Roundup® AI
China’s urban unemployment rate for 16–24-year-olds excluding students rose to 18.9% in August from 17.9% in July, according to the National Bureau of Statistics.
A record influx of university graduates is struggling to find work in a Chinese job market weighed down by weak domestic demand and the growing adoption of artificial intelligence.
The 18.9% reading, matching August of the previous year, is the highest since Beijing revised its methodology in 2023 to exclude students, after a 21.3% peak under the old measure in June of that year.
Related Articles:
The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism— About 30% of Chinese industrial companies are unprofitable "zombies" kept alive by subsidies far larger than those elsewhere, rather than exiting amid falling industrial producer prices. Countries with large increases in manufactured imports from China also saw slowdowns in domestic manufacturing, including declining manufacturing shares of output across most of Southeast Asia.
Social Media in China Is Getting Really Dark— Posts across Chinese social media platforms including RedNote, Douyin and Weibo describe low wages, scarce jobs, falling property values and fear about the future, with some users turning hardship into dark humor or mocking official propaganda. The volume of pessimistic and sarcastic posts is striking given that China's internet censorship has grown more ruthless over the past decade.
China’s Great Jobs Squeeze— China's "flexible employment" — a loosely defined official category spanning part-time work, self-employment, and new work forms — is estimated at 320mn people, up from 280mn a year earlier, with more than 53mn working as food delivery or ridesharing drivers. Analysts argue this reflects broad labour-market weakness, as low aggregate demand weakens workers' bargaining power.
AI Summary.The authors estimate that more than half of the rise in the top 1% income share since 1985 — 5.8 of 10.5 percentage points — flowed through pass-through businesses, counting roughly 3m wealthy private business owners with average net worth near $25m running law firms, dealerships, and medical practices.
Torsten SløkApollo
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More than half the increase in the top 1% income share since 1985 flowed through pass-through businesses to ~ 3mm private business owners with a mean net worth of ~$25mm.
Did most of the top 1% income gain come from private businesses?
Core argument: Owen Zidar and Eric Zwick find that 5.8 of the 10.5 percentage-point rise in the U.S. top 1% income share since 1985 flowed through pass-through businesses, more than half of the increase.
The income that lifted America's top 1% did not come mainly from tech or Wall Street, according to Owen Zidar and Eric Zwick. More than half of the rise in the top 1% income share since 1985, 5.8 of 10.5 percentage points, flowed through pass-through businesses. Zidar and Zwick, counted roughly 3 million wealthy private business owners, with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains, the kind of businesses that make their owners wealthy and well known in their own communities without ever making them nationally famous.
Takeaways by Macro Roundup® AI
Owen Zidar and Eric Zwick find that 5.8 of the 10.5 percentage-point rise in the U.S. top 1% income share since 1985 flowed through pass-through businesses, more than half of the increase.
Zidar and Zwick count roughly 3 million wealthy private business owners with average net worth near $25 million, running law firms, car dealerships, medical practices, commercial contractors and regional restaurant chains.
The income that lifted America’s top 1% did not come mainly from tech or Wall Street, according to Zidar and Zwick, but from businesses whose owners are well known locally without becoming nationally famous.
Related Articles:
What’s Missing in the Fed’s Data about Ultrarich Portfolios— The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.
They’re Rich but Not Famous—and They’re Suddenly Everywhere— An analysis of Federal Reserve data estimates about 430,000 U.S. households are worth $30m or more, including roughly 74,000 worth at least $100m, with growth in the number of very rich households outpacing overall population growth over recent decades. Nearly 72% of the top 0.1%'s wealth consists of corporate equities, mutual fund shares, and private businesses.
Capitalists in the Twenty-First Century— Most income at the top of the US distribution is non-wage income, primarily profits from closely-held, mid-market firms in skill-intensive industries owned by working-age individuals. The authors find private business profit falls by three-quarters after an owner retires or dies prematurely, indicating most top earners are "working rich" deriving income from human capital.
AI Summary.Wage gains have trailed inflation for five months, and consumer prices are 27% higher than at the start of 2021. The "misery index," the sum of the inflation and unemployment rates, stands at 7.5, up from 6.7 a year earlier.
David Uberti, Justin Lahart and Aaron ZitnerWall Street Journal
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Over the past five months, real wages as measured by average hourly earnings have declined. Okun’s “misery index” is now 7.5, just above its October 2024 level of 6.7.
Are wage gains falling behind rising consumer prices?
Core argument: Consumer prices are 27% higher than in January 2021, when Biden took office, and wage gains have failed to keep pace with inflation for five months.
For five months, wage gains haven’t kept pace with inflation and, especially with the sharp increase in gasoline prices over the past few weeks, they aren’t likely to keep up this month. University of Chicago Booth School of Business economist Christina Patterson said employees who achieve pay bumps often bear a burden. “You negotiate. You get an outside offer. You switch jobs. You threaten to leave,” she said. “All of those actions are costly. They disturb employer-employee relationships. You lose co-workers. You have to move.” Consumer prices are now 27% higher than they were in January 2021. One long-popular benchmark of economic conditions is the “misery index,” a simple summing up of the inflation and unemployment rate, it now stands at 7.5, higher than the 6.7 it was at in October 2024, just before Harris lost the presidency to Trump.
Takeaways by Macro Roundup® AI
Consumer prices are 27% higher than in January 2021, when Biden took office, and wage gains have failed to keep pace with inflation for five months.
The “misery index,” a summing of the inflation and unemployment rates devised by economist Arthur Okun, stands at 7.5, above the 6.7 recorded in October 2024 before Kamala Harris lost to Trump.
University of Chicago Booth School of Business economist Christina Patterson said workers who win pay bumps often bear a burden through negotiating, obtaining outside offers, switching jobs, or threatening to leave, actions that disturb employer-employee relationships and can require moving.
Related Articles:
The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly— Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation— Firms set nominal wage increases by round-number rules—about 42% of increases below 6% fell within 0.01 percentage points of a whole or half number—and these rules rose only from about 2.7% to 3.5% as inflation peaked near 7%, contributing to falling real wages for job stayers.
Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections— An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.
