“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
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“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
“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
“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
“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
“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 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
AI Summary.Russia's health regulator said inspections of a Siberian anti-plague institute found no emergency situations and no epidemiological risk after a 28-year-old researcher there died of pneumonia of unknown origin. The World Health Organization said it had not received sufficient information from Russia to complete a full risk assessment, and Russia declined offers of outside assistance.
Paul SonneNew York Times
Date Posted:
Russian authorities maintain that no “emergencies” have occurred at the Irkutsk Anti-Plague Research Institute. Jennifer Nuzzo, an epidemiologist at Brown University said, “Something is not adding up about this situation. You don’t quarantine 200 people for one plague case. You don’t close multiple hospital units in response to one infection.”
Is international concern persisting after a lab researcher's unexplained death?
Core argument: Russia’s health regulator Rospotrebnadzor said two biological safety commissions found “no emergency situations” at the Irkutsk Anti-Plague Institute after 28-year-old researcher Darya Shipilova died October 2, 2026, of pneumonia of unknown origin.
Russian authorities said on Wednesday that a researcher at a Siberian anti-plague institute who died from a mysterious pneumonia had been vaccinated against the pathogens she worked with and that no “emergency situations” had occurred at the lab. Rospotrebnadzor, the Russian health regulator, issued the statement after the United States urged Moscow to be more forthcoming about the possible public health incident and the World Health Organization asked for more information to make an accurate assessment of any threat. The relatively thin details from the Russian authorities have unnerved U.S. officials and others around the world who remain scarred by the coronavirus pandemic and efforts by the authoritarian government in China, where the virus originated, to cover up information.
Takeaways by Macro Roundup® AI
Russia’s health regulator Rospotrebnadzor said two biological safety commissions found “no emergency situations” at the Irkutsk Anti-Plague Institute after 28-year-old researcher Darya Shipilova died October 2, 2026, of pneumonia of unknown origin.
Medical observation was completed for more than 90% of Shipilova’s contacts with no infectious pathology detected, and nearly 5,000 laboratory tests found no hazardous pathogenic microorganisms.
The World Health Organization said the public health risk to the general population appears low, then later said Russia had not provided sufficient information to complete a full risk assessment, after the U.S. State Department sent a diplomatic démarche and Russian officials declined President Trump’s offer of assistance.
Related Articles:
US ‘Monitoring’ Situation Around Suspected Case Of Plague In Russia— The US says it is monitoring a suspected case of pneumonic plague in Russia, where authorities have imposed sweeping quarantine measures in Siberia while maintaining there has been no outbreak. Regional officials convened an emergency meeting with the public health authority over a suspected case of a highly dangerous infectious disease.
The Russian Paradox: So Much Education, So Little Human Capital— Russia is an exception to the global correspondence between educational attainment and human capital, combining an advanced educational profile with strikingly poor health outcomes and only weak contributions to knowledge production and skills-intensive service exports. World Health Organization estimates put male life expectancy at age 15 near that of the world's least developed countries.
Russians Shun Putin’s Plea for More Babies as Population Shrinks— Russia's population decline has accelerated, with births falling 3.4% to 1.22m — the lowest level in roughly 25 years — while deaths rose 3.3% to 1.82m, according to Russia's Federal Statistics Service. The decline is attributed in part to Russia's war on Ukraine, though detailed mortality data has been classified and war deaths enter the statistics with long delays.
AI Summary.The US says it is monitoring a suspected case of pneumonic plague in Russia, where authorities have imposed sweeping quarantine measures in Siberia while maintaining there has been no outbreak. Regional officials convened an emergency meeting with the public health authority over a suspected case of a highly dangerous infectious disease.
Anastasia Stognei and Katya AreninaFinancial Times
Date Posted:
A researcher at Siberia’s Irkutsk Anti-Plague Research Institute died two days after being admitted to a hospital, likely of pneumonic plague. Local hospitals have been quarantined.
Is the US watching a suspected plague case in Russia?
Core argument: The US said it is monitoring developments around a suspected case of pneumonic plague in Russia, where authorities have imposed sweeping quarantine measures in Siberia while insisting no outbreak has occurred.
The US has said it is monitoring developments relating to a suspected case of pneumonic plague in Russia, which has imposed sweeping quarantine measures in Siberia over the incident while insisting there has been no outbreak. The scale of the Russian authorities’ response suggested they were treating the situation as exceptional. Irkutsk region governor Igor Kobzev said in a social media post on October 2 that he held an “emergency meeting” [with the public health authority Rospotrebnadzor] over “a suspected case of a highly dangerous infectious disease.”
Takeaways by Macro Roundup® AI
The US said it is monitoring developments around a suspected case of pneumonic plague in Russia, where authorities have imposed sweeping quarantine measures in Siberia while insisting no outbreak has occurred.
Irkutsk region governor Igor Kobzev said in a social media post that he held an “emergency meeting” with the public health authority Rospotrebnadzor over “a suspected case of a highly dangerous infectious disease.”.
The scale of the Russian authorities’ response suggested they were treating the situation as exceptional.
Related Articles:
Mass Mortality and Infected Mammals: Australia’s Bird Flu Fears Come True— Australia has begun vaccinating at-risk bird species against H5N1 bird flu, including 5,000 little penguins in Victoria, and has confirmed its first case in a long-nosed fur seal, a species for which no vaccine is approved. The government says the disease has not reached poultry or farms and human risk remains low.
The Russian Paradox: So Much Education, So Little Human Capital— Russia is an exception to the global correspondence between educational attainment and human capital, combining an advanced educational profile with strikingly poor health outcomes and only weak contributions to knowledge production and skills-intensive service exports. World Health Organization estimates put male life expectancy at age 15 near that of the world's least developed countries.
Russians Shun Putin’s Plea for More Babies as Population Shrinks— Russia's population decline has accelerated, with births falling 3.4% to 1.22m — the lowest level in roughly 25 years — while deaths rose 3.3% to 1.82m, according to Russia's Federal Statistics Service. The decline is attributed in part to Russia's war on Ukraine, though detailed mortality data has been classified and war deaths enter the statistics with long delays.
AI Summary.The U.S.-bound shipping network once turned about 89% of potential fleet capacity into effective service, but utilization fell below 70% as ships waited at anchor, slowed steaming, or sailed around maritime bottlenecks, and has not recovered. Diverting vessels around the Cape of Good Hope drives much of the loss.
Xiwen Bai, Jesús Fernández-Villaverde, Yiliang Li, Ricardo Marto and Francesco ZanettiNational Bureau Of Economic Research
Date Posted:
US-bound shipping can fall far short of potential after disruptions. Pandemic queuing and slow steaming drove effective capacity from ~89% of potential to <70%. Later, Houthi attacks left it near 79% as ships rerouted around the Cape of Good Hope.
Why has shipping capacity to America not regained its prior utilization?
Core argument: The U.S.-bound shipping network converted about 89% of potential fleet capacity into effective service in 2016–2019, but aggregate utilization fell below 70% in 2021–2022 as ships waited at anchor, steamed slowly, or sailed around maritime bottlenecks.
In 2016–2019, the U.S.-bound shipping network turned about 89% of the fleet’s potential capacity into effective service [Figure 3.5]. During 2021–2022, effective capacity declined despite potential capacity reaching record highs. Pandemic-era port congestion and slower steaming pushed aggregate utilization below 70%. On the Asia-Pacific–U.S. West Coast route, utilization fell from about 92% before 2020 to 53% by late 2021. The route has since recovered but remains below its old peak. The network as a whole has not regained its pre-pandemic utilization. More recently, rerouting after the 2023–2024 Houthi attacks in the Red Sea held aggregate utilization near 79%. Utilization on the Middle East and Asia-Pacific routes to the U.S. East Coast via Suez fell to 48% and 61%, respectively, largely because diversion around the Cape of Good Hope lengthened voyages without increasing cargo delivered.
Takeaways by Macro Roundup® AI
The U.S.-bound shipping network converted about 89% of potential fleet capacity into effective service in 2016–2019, but aggregate utilization fell below 70% in 2021–2022 as ships waited at anchor, steamed slowly, or sailed around maritime bottlenecks.
Utilization on the Asia-Pacific–U.S. West Coast route dropped from 92% before 2020 to 53% by late 2021 amid port congestion and slower steaming, recovering since but remaining well below its old peak.
Since late 2023, utilization on the Middle East and Asia-Pacific routes to the U.S. East Coast via the Suez Canal has fallen to 48% and 61%, with diversions around the Cape of Good Hope driving much of the loss as ships travel longer distances without delivering additional cargo.
Related Articles:
How to Fight an Economic War— China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.
Industrial Policy and Economic Security— Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.
The Rise Of The Security Premium— Energy security concerns, not environmentalism, are argued to drive the buildout of solar, wind, and nuclear power, since domestic generation avoids chokepoints like Hormuz, the Red Sea, and the Panama Canal. China and India are expected to demand higher strategic stockpiles of energy and other critical commodities, repricing security above efficiency.
AI Summary.US defense contractors face a coming requirement to remove certain metals sourced from China and other adversary countries from their supply chains, which many contractors say isn't feasible, while some Pentagon officials target a "closed loop" of US and allied supply for some minerals by 2030.
Heather Somerville and Andrew MollicaWall Street Journal
Date Posted:
CRU, a UK commodities-data provider, projects China will lose market share in many of the elements and minerals it has most tightly controlled by 2030, with the exception of cobalt.
Can defense contractors remove Chinese-sourced critical minerals from supply chains?
Core argument: U.S. defense contractors will be required by next year to eliminate certain metals sourced from adversary countries including China, a requirement many contractors say isn’t feasible despite the progress being made.
By next year, U.S. defense contractors will be required to eliminate from their supply chain certain metals sourced from adversary countries including China, a requirement that many contractors say isn’t feasible despite the progress being made. Some Pentagon officials say they are aiming for a “closed loop” of U.S. and allied supply chains for some minerals by 2030. In April, Deputy U.S. Trade Representative Rick Switzer said that with help from Japan and Europe, the U.S. has the capacity to develop an end-to-end critical-minerals supply chain free of China within six to 12 months, if the country were pressed to do so. Recent projections from CRU, a London-based commodities-data provider, show China losing market share by the end of the decade in many of the elements and minerals it had most tightly controlled.
Takeaways by Macro Roundup® AI
U.S. defense contractors will be required by next year to eliminate certain metals sourced from adversary countries including China, a requirement many contractors say isn’t feasible despite the progress being made.
Deputy U.S. Trade Representative Rick Switzer said in April that, with help from Japan and Europe, the U.S. has the capacity to develop an end-to-end critical-minerals supply chain free of China within six to 12 months if pressed to do so.
Projections from CRU, a London-based commodities-data provider, show China losing market share by the end of the decade in many of the elements and minerals it had most tightly controlled, while some Pentagon officials aim for a “closed loop” of U.S. and allied supply chains for some minerals by 2030.
Related Articles:
China Restricts Trading With Some US Rare Earth Companies— China has added 10 American companies to its "entities list," restricting trading with firms central to US efforts to build a rare earth supply chain rivaling Beijing's, including USA Rare Earth, MP Materials, and motor manufacturer Aveox.
How to Fight an Economic War— China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.
How Japan Built a Rare-Earth Supply Chain Without China— Japan has reduced its reliance on Chinese rare earths, with industry estimates putting China's share of Japanese rare-earth imports at roughly 60% to 70%, down from 90% or more. Japan's alternative chain runs from an Australian open-pit mine through a separation plant in Malaysia to Japanese magnet makers supplying automakers.
AI Summary.China has extended travel restrictions on top artificial intelligence and chip talent to their spouses and children, who must now obtain government approval before going abroad even for short trips. The requirement broadens existing curbs on the movement of influential technology entrepreneurs, researchers and executives.
Bloomberg StaffBloomberg
Date Posted:
Beijing has expanded overseas travel restrictions for top AI professionals to include their families. While not an outright ban, foreign travel will now require state approval.
Is China extending travel approval requirements to tech talent's families?
Core argument: China now requires spouses and children of certain AI and chip executives whose work is deemed paramount to state security to obtain Beijing’s approval before traveling abroad, even for short trips, according to people familiar with the matter.
Government agencies have recently begun to share the wider restrictions with affected people, which include prominent startup founders as well as the heads of strategically important companies in AI-related fields. Direct relatives such as spouses and children of certain AI and chip executives, whose work is considered paramount to state security, are now required to obtain approval from Beijing before going abroad even for short trips. That marks a broadening of existing curbs on the freedom of movement of China’s most influential tech talent. While not an outright ban on travel, the new requirement is likely to exert a further chilling effect on a tech sector already facing unprecedented curbs. China has restricted foreign travel for top AI professionals in private firms such as Alibaba and DeepSeek since earlier this year.
Takeaways by Macro Roundup® AI
China now requires spouses and children of certain AI and chip executives whose work is deemed paramount to state security to obtain Beijing’s approval before traveling abroad, even for short trips, according to people familiar with the matter.
The restrictions extend to prominent startup founders and heads of strategically important companies in AI-related fields, broadening existing curbs on the movement of China’s entrepreneurs, researchers and executives.
China has restricted foreign travel for top AI professionals at private firms such as Alibaba and DeepSeek since earlier this year, and the new family requirement is likely to exert a further chilling effect on the tech sector.
Related Articles:
Who’s Ahead in the Global AI Talent Race?— 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.
China Tightens Control Of Overseas Travel In Sweeping New Law— China has imposed new legal controls on overseas travel that formalise restrictions on mid-to-senior civil servants, Communist Party cadres, state-owned enterprise employees, and private citizens working in sensitive areas, as part of efforts to protect state secrets, advanced technology, and highly skilled workers. Violators face steep fines and exit bans ranging from three months to indefinite.
The Future, Made In China— China's economy runs on parallel tracks: a property crash, a booming high-tech manufacturing sector, and university graduates trained for traditional white-collar jobs entering a labor market geared toward advanced manufacturing. Researchers at Stanford and Harvard found a swing from optimism to pessimism, with about 28% of citizens expecting living standards to improve.
AI Summary.The cost of hiring the largest crude oil tankers from the Persian Gulf to Asia has risen 12-fold in months to a record $1.1m a day, reflecting the danger of crossing the Strait of Hormuz. Rates on routes far from the Middle East have also climbed 400–500%.
Javier BlasBloomberg
Date Posted:
The cost of hiring a VLCC from the Gulf to Asia has risen to $1.1mm a day, up from ~$100,000 at the start of the year. Costs on other routes not directly impacted by the US-Iran war, such as the Gulf of Mexico to Asia, have also surged 400–500% y/y.
Are soaring oil tanker rates driving the next inflation shock?
Core argument: Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
The cost of hiring the largest tankers, Very Large Crude Carriers (VLCC), from the Persian Gulf to Asia — a benchmark route — has risen 12-fold in just a few months to a record high of $1.1 million a day. Earlier this year, most shipowners would have considered $100,000 a day a superb price and $50,000 a good one. The $1-million-a-day price tag reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk. But costs elsewhere, even far from the Middle East, have also ballooned. The route from the Gulf of Mexico to Asia is about $338,000 a day, up 400% from a year ago; from West Africa to China stands at about $486,000 a day, an increase of nearly 500%.
Takeaways by Macro Roundup® AI
Hiring a Very Large Crude Carrier from the Persian Gulf to Asia has risen 12-fold in a few months to a record $1.1 million a day, against the $100,000 a day shipowners earlier this year considered a superb price.
The $1-million-a-day rate reflects the danger of crossing the Hormuz waterway and the fact that few shipowners are willing to take the risk.
Tanker rates far from the Middle East have also ballooned, with the Gulf of Mexico to Asia route at about $338,000 a day, up 400% from a year earlier, and West Africa to China at about $486,000 a day, up nearly 500%.
Related Articles:
U.S. Economy Less Vulnerable To Geopolitical Oil Price Shocks Than In The Past— The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Goldman Says Gulf Oil Exports at Two-Thirds of Pre-War Level— Goldman Sachs estimates Persian Gulf crude and oil product exports have recovered to about 15–16m barrels a day, roughly two-thirds of pre-war levels and above a trough of 5–6m barrels a day, limiting the Iran war's impact on global crude prices. Transits through the Strait of Hormuz are likely close to US officials' estimates of 8–10m barrels a day.
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
AI Summary.China's Communist Party accused two former top military leaders, Zhang Youxia and Liu Zhenli, of forming cliques, being disloyal to the party, and corruption involving "exceptionally large" sums as it moved to expel them. The Center for Strategic and International Studies counted 36 generals and lieutenant generals officially purged.
Edward WhiteFinancial Times
Date Posted:
The CCP formally moved to expel two generals who had been the last two professional officers on China’s Central Military Commission and were purged at the start of the year.
Is China purging its top military leaders for disloyalty?
Core argument: China’s Communist Party accused former Central Military Commission first vice-chair Zhang Youxia and fellow former CMC member Liu Zhenli of forming “cliques and factions” and being “disloyal and dishonest to the party” as it moved to expel them.
China’s Communist Party accused two of Xi Jinping’s former top generals of disloyalty as it moved to expel them from its ranks on Monday, underlining the political nature of Xi’s purge of the military. Zhang Youxia, the former first vice-chair of the Central Military Commission and fellow former CMC member Liu Zhenli, “formed cliques and factions, and were disloyal and dishonest to the party,” official media said on Monday. The Center for Strategic and International Studies said in February that 36 generals and lieutenant generals had been officially purged since 2022, while a further 65 officers were missing or potentially purged.
Takeaways by Macro Roundup® AI
China’s Communist Party accused former Central Military Commission first vice-chair Zhang Youxia and fellow former CMC member Liu Zhenli of forming “cliques and factions” and being “disloyal and dishonest to the party” as it moved to expel them.
State news agency Xinhua and Chinese state television reported that Zhang Youxia and Liu Zhenli were involved in corruption involving “exceptionally large” sums.
The Center for Strategic and International Studies said 36 generals and lieutenant generals had been officially purged since 2022, with a further 65 officers missing or potentially purged.
Related Articles:
Xi the Destroyer— China's leadership overhauling the senior ranks of its military signals relative comfort with the country's external environment, including cross-strait dynamics, as US commitments to Taiwan appear uncertain and Taiwanese politics shift in Beijing's favor. The author argues the purge shows Xi using cross-strait calm to prepare the military for possible conflict over Taiwan.
The Sinister Disappearance Of China’s Bosses— China's liuzhi detention system operates alongside normal policing, requiring no court approval and denying detainees lawyers, with windowless cells, constant lighting and round-the-clock supervision. Stock-exchange filings show 39 executives at listed companies disappearing into the system by the end of September, exceeding the prior year's record.
China’s Military Says Top General Undermined Xi Jinping’s Authority— China's military newspaper has accused two top generals — the vice chair of the Central Military Commission and the People's Liberation Army's chief of staff — of trampling the "chairman responsibility system" that gives China's leader supreme decision-making power over the armed forces, alongside corruption charges.
AI Summary.Defense start-up Covenant plans to produce 1,000 Anthem deep-strike missiles a year at each of its German and US plants in 2027, rising to 5,000 a year at each site from 2028. At mid-six-figure euros each, versus roughly $4mn-$6mn for Tomahawks, the company says militaries could fire saturating barrages.
Laura PitelFinancial Times
Date Posted:
Covenant, a defense start-up, is opening manufacturing facilities in the US, Germany, and Israel to manufacture its new deep-strike munition at scale, with a production target of 5,000 annually at its US and German sites in 2028.
Can cheaper mass-produced missiles let militaries saturate targets with barrages?
Core argument: Covenant plans to produce 1,000 Anthem missiles a year at each of its German and US plants in 2027, rising to 5,000 a year at each site from 2028.
Covenant aims to produce 1,000 Anthem missiles a year at each of its German and US plants in 2027, and 5,000 a year at each site from 2028. [Anthem] would cost in the “mid six-figure” euros — a fraction of the price of Tomahawks, which are sold to overseas governments for roughly $4mn-$6mn apiece. Covenant declined to state the range of the Anthem but [Covenant's CEO] said the concept was partly a response to a German-British plan to jointly develop “deep precision strike” weapons with a range of more than 2,000km. Anthem will carry a warhead weighing up to 250kg half the 450kg payload of a Tomahawk. But Covenant said the lower cost and ability to be produced at scale would allow militaries to fire large barrages of the missiles to “saturate” targets such as weapons factories or military bases.
Takeaways by Macro Roundup® AI
Covenant plans to produce 1,000 Anthem missiles a year at each of its German and US plants in 2027, rising to 5,000 a year at each site from 2028.
Covenant prices the Anthem in the mid six-figure euros, a fraction of the roughly $4mn–$6mn that Tomahawks are sold for to overseas governments.
The Anthem will carry a warhead of up to 250kg, half the 450kg payload of a Tomahawk, and Covenant says its lower cost and scale would let militaries fire large barrages to saturate targets such as weapons factories or military bases.
Related Articles:
How Quickly Can the DOD Rebuild and Recast the Munitions Industrial Base?— The US Department of Defense's budget documents indicate low-cost munitions will reach scale before most advanced systems, with multi-year agreements projected to raise PAC-3 MSE interceptor capacity 233% to 2,000 per year, THAAD interceptors 317% to 400, and Precision Strike Missile output fourfold to about 550.
Is the Industrial Base on a Wartime Footing? A Progress Report— About 10,000 new firms have entered the US defense market in two years, and nontraditional companies received over $120bn in contract obligations in fiscal 2025, while munitions contract obligations have risen 330% since fiscal 2010. The Defense Department is signing large-scale multiyear munitions agreements and backing a rare earth supply chain outside Chinese control.
The Intellectual Spoils of War? Defense RD, Productivity and International Spillovers— The authors estimate that a 10% increase in government-financed R&D, largely defense, is associated with a 4.3% rise in privately funded R&D across OECD countries, indicating "crowding in" rather than "crowding out." They also find international spillovers raise private R&D abroad, though the overall effect on US productivity growth is modest.
