“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“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
“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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“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
AI Summary.Regression evidence suggests governments can buy current account surpluses: raising the fiscal balance by $1 tends to raise the current account by about $0.30, while issuing $1 of domestic-currency debt to buy foreign-currency assets raises it by roughly $0.50-$0.60. Combining a fiscal surplus with foreign-currency investment, as Norway and Singapore do, yields about $0.80 per $1.
Joseph Gagnon and Nishtha AgrawalPeterson Institute For International Economics
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Using annual data for 146 countries from 1985 – 2024, Gagnon and Agrawal find that a $1 increase in a country’s cyclically adjusted fiscal deficit is associated with a 22–38¢ increase in its current-account deficit, with most of the estimates ~30¢.
Can governments buy current account surpluses with fiscal and currency policy?
Core argument: Regression results suggest that raising the fiscal balance by $1 tends to raise the current account by about $0.30.
Table 1 presents regression results. The evidence strongly suggests that governments can buy current account surpluses. Raising the fiscal balance by $1 tends to raise the current account by $0.30 [Table 1, first row]. Issuing $1 of domestic currency debt to buy foreign-currency assets (foreign exchange intervention) raises the current account anywhere from $0.20 to $1.00, with a value around $0.50 to $0.60 most plausible [Rows 2 though 5]. NOF is Net Official Flows, and NOS is the stock of net official foreign assets. The most powerful policy, as exemplified by Norway and Singapore, is to run a fiscal surplus and invest the proceeds in foreign-currency assets. In that case, $1 buys a current account surplus of around $0.80 or so. The results are supported by annual panel regressions of current accounts and cross-country stock regressions of cumulated current accounts or stocks of net foreign assets. The estimated effects in the panel regressions may be biased down slightly by incomplete modeling of lagged effects.
Takeaways by Macro Roundup® AI
Regression results suggest that raising the fiscal balance by $1 tends to raise the current account by about $0.30.
Issuing $1 of domestic currency debt to buy foreign-currency assets is estimated to raise the current account by $0.20 to $1.00, with $0.50 to $0.60 most plausible.
Combining a fiscal surplus with investment of the proceeds in foreign-currency assets, as Norway and Singapore do, is estimated to buy a current account surplus of around $0.80 per $1.
Related Articles:
Understanding Global Imbalances— The US, China, Germany, and Japan account for roughly two-thirds of global current account imbalances, with the US deficit at 4% of GDP financed by capital inflows into dollar assets. The average duration of a surplus or deficit spell roughly doubled since the 1980s, building large net foreign asset and liability positions.
The U.S. Trade Deficit: Myths and Realities— Taxing capital inflows would weaken the dollar but could raise domestic interest rates and depress investment, harming long-term growth, while an interest rate cut absent recession would be inflationary and erode any real depreciation needed to durably improve the trade balance. Fiscal restraint could weaken the dollar and reduce the trade deficit.
The Dangerous Triumph Of Neo-Mercantilism— Neo-mercantilism is thriving in both China, which pairs infant-industry promotion with large trade surpluses, and in a United States focused on external deficits and protecting domestic markets. The author argues this will likely fracture the world economy, and that a new multilateral treaty could include a mechanism to combat large structural trade surpluses.
AI Summary.China's record goods trade surplus surpassed $1tn, driven by fierce domestic competition among manufacturers that investors describe as malignant but that yields high-quality products at prices rivals struggle to match. European leaders have called the surge of high-tech Chinese goods an existential threat to their continent's manufacturing.
Ryan McMorrow, Sam Fleming, Peter Foster and Joe LeahyFinancial Times
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As Chinese firms’ profits vanish in the face of “involution,” a second China Shock is underway. China boosted exports ~15% y/y in the first 3 months of 2026. China’s Jaecoo 7 SUV, with a starting price of £29,000, was the UK’s best-selling car in March.
Is domestic competition in China making its manufacturers unbeatable abroad?
Core argument: China recorded a record goods trade surplus surpassing $1tn in 2025, alongside a surge of high-quality Chinese goods sold at low prices.
“Companies that can survive in China are unbeatable anywhere else in the world,” says Huang He, an investor in Mega-Senway and more than a dozen other Chinese industrial groups. Chinese founders have to “use every possible means” to survive, he says, collectively creating the country’s unmatchable competitiveness. “China is full of engineers — tech barriers last six months to a year at most.” For Huang it feels like a whirlpool sucking his company downwards. “This is not a healthy situation,” he says. “There’s malignant competition.” The outside world sees unstoppable Chinese champions selling quality products at impossible prices. After racking up a record trade surplus in goods that surpassed $1tn in 2025. France’s President Emmanuel Macron, one of several European leaders to visit Beijing in the past six months, did not mince his words on a threat he sees as existential. The surge of high-quality Chinese goods, he said, represented nothing less than a “question of life or death” for manufacturing on his continent.
Takeaways by Macro Roundup® AI
China recorded a record goods trade surplus surpassing $1tn in 2025, alongside a surge of high-quality Chinese goods sold at low prices.
French President Emmanuel Macron called the surge of high-quality Chinese goods a "question of life or death" for manufacturing in Europe.
Chinese investor Huang He attributes China's competitiveness to founders using "every possible means" to survive and an abundance of engineers that limits technology barriers to six months to a year, calling the resulting "malignant competition" unhealthy.
Related Articles:
The Deflation Doom Loop Trapping China’s Economy— China's broad price gauge, the GDP deflator, has been negative since 2023, indicating weak domestic demand, with profits shrinking across industries from steel and electric vehicles to cosmetics and profit margins among publicly traded mainland firms at their lowest since 2009. Fixed-asset investment in homes, factories and roads fell for the first time on record.
What’s New About Involution?— China's cycle of relentless competition and price cutting stems from its long-standing growth model, with the latest phase driven by an engineered shift of investment from property into manufacturing that was not tied to expected demand growth. Administrative fixes and exports shift excess capacity between sectors rather than resolving it.
Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push— Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
AI Summary.Chinese exports rose nearly 22% year-over-year in the first two months of 2026, exceeding expectations and producing a record trade surplus for the period. Growth is concentrated in less labor-intensive goods such as batteries, cars and chips, while an alternative wage measure sits near its lowest level outside the pandemic.
Bloomberg StaffBloomberg
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In the first two months of the year, China’s exports were 22% above their level a year earlier. A Goldman analysis found that as of Q3 2025, wages had grown at close to their lowest y/y level on record, excluding the pandemic period.
Does surging export growth lift wages for China's factory workers?
Core argument: Chinese exports rose almost 22% from a year earlier in the first two months of 2026, exceeding expectations and producing a record trade surplus for the period, according to official data.
Official data on Tuesday showed Chinese exports surged almost 22% from a year earlier in the first two months of 2026, an increase that was more than expected and resulted in a record trade surplus for the period. Future technologies such as batteries, cars and chips — deemed essential for competing with the US — are taking a larger share of exports, but those products are less labor intensive. Perhaps more alarming for global trade, the trend only appears set to get worse in the short term as an explosion of AI and robotics spawns so-called dark factories that require no human workers. An alternative measure of China’s wage growth compiled by Goldman Sachs is hovering around the lowest level outside the pandemic in data going back to the beginning of the century. Further masking the pain is gig work, which now accounts for about 40% of urban employment.
Takeaways by Macro Roundup® AI
Chinese exports rose almost 22% from a year earlier in the first two months of 2026, exceeding expectations and producing a record trade surplus for the period, according to official data.
Batteries, cars and chips — technologies deemed essential for competing with the US — are taking a larger share of Chinese exports, but those products are less labor intensive, and AI and robotics are spawning dark factories requiring no human workers.
An alternative measure of Chinese wage growth compiled by Goldman Sachs is hovering near its lowest level outside the pandemic in data going back to the beginning of the century, with gig work now about 40% of urban employment.
Related Articles:
The True Cost of China’s Falling Prices— Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.
China’s Trade Surplus, Part I— China's very high investment rates, combined with a shrinking workforce and slowing productivity, produce sharply diminishing returns, making its decades-old high-savings, high-investment growth model unsustainable. The author argues China's leaders resist a pivot toward consumption because of ideology and geopolitical ambition, with the leadership rejecting welfare spending as breeding dependency.
Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push— Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
AI Summary.The US goods and services trade deficit reached $901.5bn for the year, one of the largest in data going back to 1960. US companies increased imports of computers and accessories by nearly $145bn from the prior year, an acceleration in demand that reflects large-scale artificial intelligence investment.
Vince Golle and Mark NiquetteBloomberg
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The US trade deficit was $901.5B in 2025, effectively unchanged from 2024 despite the new tariff regime. The US bilateral deficit with China fell to $202B, the smallest in 20 years, while the gap with Taiwan widened to a record $146.8B.
Is artificial intelligence investment driving a larger US trade deficit?
Core argument: The US goods and services trade deficit totaled $901.5 billion for the full year, one of the largest in Commerce Department data going back to 1960.
The US trade deficit widened in December, capping a turbulent year of erratic tariff policy. The goods and services trade gap expanded from the prior month to $70.3 billion, Commerce Department data showed Thursday. The shortfall culminated in a full-year deficit of $901.5 billion, still one of the largest in data back to 1960. Last year, US companies imported nearly $145 billion worth of computers and accessories more than they did in 2024. The acceleration in demand reflected the massive investment underway in artificial intelligence.
Takeaways by Macro Roundup® AI
The US goods and services trade deficit totaled $901.5 billion for the full year, one of the largest in Commerce Department data going back to 1960.
The monthly US trade gap widened to $70.3 billion in December from the prior month, according to Commerce Department data, capping a year of erratic tariff policy.
US companies imported nearly $145 billion more in computers and accessories than in 2024, an acceleration in demand that reflected the investment underway in artificial intelligence.
Related Articles:
The Dangerous Triumph Of Neo-Mercantilism— Neo-mercantilism is thriving in both China, which pairs infant-industry promotion with large trade surpluses, and in a United States focused on external deficits and protecting domestic markets. The author argues this will likely fracture the world economy, and that a new multilateral treaty could include a mechanism to combat large structural trade surpluses.
China Blames US For Trade Imbalances As Surplus Hits Record $1.2tn— China reported a record annual goods trade surplus of $1.2tn, with monthly exports growing 6.6% year over year in dollar terms, more than double analysts' average forecast of 3.1%. Chinese customs officials argue that other countries' restrictions on high-tech exports to China are holding down China's imports.
The Budget and Economic Outlook: 2026 to 2036— The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
AI Summary.From 2008 to 2023 the US household and corporate sectors ran average savings surpluses of 3.5% and 1.6% of GDP respectively, leaving the federal government as the dominant net borrower in the US economy. This suggests the benefit of persistent net capital inflows is the ability to run larger fiscal deficits and grow public debt.
Martin WolfFinancial Times
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Between 2008–2023, the US household and corporate sectors ran a mean surplus of 3.5% and 1.6% of GDP, respectively. “On a net basis, the US private sector does not need foreign savings,” Martin Wolf argues.
Do foreign capital inflows mainly finance larger US budget deficits?
Core argument: US households ran surplus savings averaging 3.5% of GDP and US corporates 1.6% of GDP from 2008 to 2023, and both sectors were close to balance from 1992 to 2007.
On average, the US household and corporate sectors had surplus savings of 3.5% and 1.6% of GDP, respectively, from 2008 to 2023. Even from 1992 to 2007, they were close to balance. So, on a net basis, the US private sector does not need foreign savings. The dominant net borrower in the US economy is the federal government. This analysis suggests that the benefit to the US of its persistent net capital inflows is the ability to have a larger fiscal deficit and so grow its public debt. This does not look like a good bargain.
Takeaways by Macro Roundup® AI
US households ran surplus savings averaging 3.5% of GDP and US corporates 1.6% of GDP from 2008 to 2023, and both sectors were close to balance from 1992 to 2007.
The US private sector on a net basis does not need foreign savings, and the federal government is the dominant net borrower in the US economy.
The analysis suggests the benefit to the US of persistent net capital inflows is the ability to run a larger fiscal deficit and grow public debt, which does not look like a good bargain.
Related Articles:
Trade Intervention for Freer Trade— The authors argue the United States should counter surplus countries' trade policies either by restricting their goods exports through tariffs or by restricting their capital inflows through taxes, volume limits, reserve requirements, transaction approvals, or investor eligibility rules. They contend capital controls are a more targeted alternative to uniform tariffs, which impose equal costs on more and less mercantilist countries.
The Challenge of Using Excess Global Savings— China, Germany and Japan together ran current account surpluses of $884bn in 2024, with the top 10 surplus countries at $1.568tn, offset by a US current account deficit of $1.134tn and a UK deficit of $123bn. The author argues surplus savings are funding government borrowing in creditworthy-currency countries rather than productive investment elsewhere.
The U.S. Trade Deficit: Myths and Realities— Taxing capital inflows would weaken the dollar but could raise domestic interest rates and depress investment, harming long-term growth, while an interest rate cut absent recession would be inflationary and erode any real depreciation needed to durably improve the trade balance. Fiscal restraint could weaken the dollar and reduce the trade deficit.
AI Summary.Balance-of-payments data from major creditor economies and the US indicate that recent inflows into dollar assets have come largely from private investors seeking yield rather than official reserve accumulation. In East Asia reserve flows tracked current account surpluses closely until 2014 and have since fallen well short, while Europe's outflows have long come from institutional investors and banks.
Brad SetserCouncil on Foreign Relations
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East Asian “reserves tracked the current account surplus almost perfectly until 2014,” but in the past 10 years outflows were driven by private investors seeking yield, “not state investors who are forced to hold safe assets.” @Brad_Setser
Are private investors, not official reserves, financing the US deficit?
Core argument: Data from both major creditor countries and the U.S. show that flows into dollar assets in recent years came largely from private investors seeking yield rather than state investors compelled to hold safe assets.
The actual data—from both the main creditor countries and the U.S.—is quite consistent here: it shows that the flow into dollar assets in the last few years has largely come from private investors seeking yield, not state investors who are compelled to hold safe assets. That’s true of Asia. Look at a chart of cumulative reserve flows from the balance of payments against the cumulative current account surplus of the largest East Asian surplus economies, setting aside the city-state financial centers. Reserves tracked the current account surplus almost perfectly until 2014, but have subsequently fallen well-short. If the analysis is extended to Europe, the same conclusion holds: reserve-related outflows never were the main counterpart to the euro area’s external surplus. The main outflow has long come from European institutional investors and banks looking for yield in fixed income markets abroad.
Takeaways by Macro Roundup® AI
Data from both major creditor countries and the U.S. show that flows into dollar assets in recent years came largely from private investors seeking yield rather than state investors compelled to hold safe assets.
Cumulative reserve flows of the largest East Asian surplus economies, excluding city-state financial centers, tracked their cumulative current account surplus almost perfectly until 2014 but have since fallen well short.
Reserve-related outflows were never the main counterpart to the euro area's external surplus, which has long been matched instead by European institutional investors and banks seeking yield in foreign fixed income markets.
Related Articles:
How China is Quietly Diversifying From US Treasuries— US Treasury data show China cut its official holdings of US Treasuries by more than 27% to $759bn, a faster decline than the preceding period, while raising holdings of higher-yielding agency bonds issued by government-sponsored entities such as Fannie Mae. Analysts argue China's true Treasury holdings may be higher, masked by intermediary custodians.
Our Thoughts on Large US Deficits and Their Impact on Bond Yields— Total borrowing in the US is about average despite high government deficits, as high public borrowing has contributed to the need for higher interest rates that have depressed private sector borrowing. Risk premiums on long-dated debt look about average, with no market signs that economic or debt limits are currently being hit.
Global Debt Report 2025— About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.
AI Summary.Asia's 11 largest economies have accumulated $7.5tn in US stocks and bonds, but their annual capital flows into the US fell to $68bn, equal to just 11% of their trade surpluses with the US. Their major currencies, including the yen and yuan, trade on average 57% below exchange rates adjusted for living-cost differences.
Ruth Carson, Masaki Kondo, Rebecca Choong Wilkins, and Diana LiBloomberg
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Asia’s 11 largest economies ran a surplus of more than $900B in 2024, and hold $7.5T of dollar assets. Their net capital flows into the US fell to $68B in 2024, and there is concern that outflows could “hit like an avalanche” to avoid FX losses.
Are Asian economies recycling less of their trade surpluses into US assets?
Core argument: Asia's 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, bringing total investments to $7.5 trillion, according to a Bloomberg analysis of US Treasury Department capital flow data.
For decades, Asia’s export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. The current-account surplus of Asia’s 11 biggest economies totaled more than $900 billion last year, according to official data tallied by Bloomberg. Collectively, the 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, taking total investments to $7.5 trillion, according to a Bloomberg analysis of capital flow data from the US Department of the Treasury. By 2024, Asia’s capital inflows into [the US] had dropped to $68 billion, making up just 11% of [its] trade surpluses with the US that had continued to expand. There are indicators suggesting that Asian currencies are severely undervalued. On average, the region’s major currencies — including the yen and yuan — are trading at 57% weaker than exchange rates that take into account differences in the costs of living, according to data compiled by Bloomberg News going back to 2007. That’s close to an all-time low of 59% set in mid-2024.
Takeaways by Macro Roundup® AI
Asia's 11 biggest economies have bought $4.7 trillion of US equities and bonds since 1997, bringing total investments to $7.5 trillion, according to a Bloomberg analysis of US Treasury Department capital flow data.
Asian capital inflows into the US fell to $68 billion by 2024, just 11% of the region's expanding trade surpluses with the US, while the current-account surplus of Asia's 11 biggest economies topped $900 billion last year.
Asia's major currencies, including the yen and yuan, trade on average 57% weaker than exchange rates accounting for cost-of-living differences, close to an all-time low of 59% set in mid-2024, according to Bloomberg data going back to 2007.
Related Articles:
Taiwan’s Markets Jolted as Currency Surges Most Since 1980s— Taiwan's dollar surged as much as 5% in a day, its largest move since 1988, as traders speculated authorities might permit appreciation to help secure a trade deal with the US. Taiwan's central bank attributed the two-day appreciation partly to market chatter and urged against irresponsible speculation.
The Coming Asian FX ‘Avalanche’— Investment firm Eurizon SLJ argues that Asian exporters have hoarded much of their trade surpluses in dollar deposits rather than repatriating them, creating an overhang the firm roughly estimates at $2.5tn in China plus more from Taiwan, Malaysia, and Korea, growing about $500bn a year. It predicts this raises the risk of a non-linear dollar sell-off.
Are Foreigners Selling US Assets?— European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.
AI Summary.Saudi Arabia has become a net consumer of foreign capital rather than a provider, accumulating $142bn in foreign debt as heavy spending on economic transformation outpaces oil revenue, with its sovereign wealth fund scaling back some projects. Estimates put the oil price needed to balance its budget near $96 a barrel.
Erik SchatzkerBloomberg
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Saudi Arabia will likely be running sustained current account deficits to help finance almost $2T of domestic investment. Spending at this level means the kingdom has not been a net provider of overseas capital since 2024.
Has Saudi Arabia shifted from exporting capital to importing it?
Core argument: Saudi Arabia needed an average oil price of $96 a barrel to balance its budget in the first quarter of 2025, rising to $113 if Public Investment Fund spending commitments are included, according to Bloomberg chief emerging-markets economist Ziad Daoud.
Saudi Arabia is no longer a net provider of overseas capital. Its own sovereign wealth fund, the Public Investment Fund, or PIF, is even scaling back on some projects. Until 2024, the kingdom ran current-account deficits only in years when crude prices collapsed – like in 2015 and 2016, after its ill-fated attempt to crush US shale-oil production, and the early Covid shock. But after a decade of unprecedented spending on the social, economic and geopolitical transformation championed by Crown Prince Mohammed bin Salman, Saudi Arabia simply doesn’t have enough revenue to fund everything. At least, not with Brent crude sliding to around $65 a barrel. It’s become a net consumer of capital and amassed $142 billion in foreign debt. According to Ziad Daoud, Bloomberg’s chief emerging-markets economist, Saudi Arabia needed an average oil price of $96 a barrel just to balance its budget in the first quarter of 2025 (and $113 if spending commitments by the PIF are included). Closing the current-account gap requires an $82 price.
Takeaways by Macro Roundup® AI
Saudi Arabia needed an average oil price of $96 a barrel to balance its budget in the first quarter of 2025, rising to $113 if Public Investment Fund spending commitments are included, according to Bloomberg chief emerging-markets economist Ziad Daoud.
Saudi Arabia has become a net consumer of capital rather than a net provider of overseas capital, amassing $142 billion in foreign debt, with Brent crude sliding to around $65 a barrel.
Until 2024, Saudi Arabia ran current-account deficits only when crude prices collapsed, as in 2015 and 2016 after its attempt to crush US shale-oil production and during the early Covid shock; closing the current-account gap requires an $82 price.
Related Articles:
The Petrodollar Is Dead, Long Live the Petrodollar— Saudi Arabia has no surplus left to recycle and is instead borrowing heavily in sovereign debt markets and selling assets, including stakes in its national oil company, to fund its economic plans. The International Monetary Fund projects the Saudi current account surplus narrowing to 0.5% of GDP before shifting into deficit through the end of the decade.
Oil Was Written Off. Now It’s the Most Productive US Industry— US oil and gas extraction productivity nearly tripled in a decade, and crude output reached a record 13.3m barrels a day — 48% above Saudi Arabia — with under a third of the rigs. BloombergNEF projects production growth of 600,000 barrels a day on higher well productivity.
Saudi Arabia’s PIF and the New Petrodollar Recycling— Saudi Arabia's Public Investment Fund appears to have taken over a significant portion of the foreign asset allocation previously handled by the Saudi Central Bank, making its balance sheet a window into a new form of petrodollar recycling. Of roughly $777bn in total assets, $305bn were current and $472bn non-current, with $225bn of the latter held as investment securities.
