Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, January 1, 2021

AI Summary. Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

Edward Conard Oxford University Press
Date Posted:

Inequality is mostly the result of an increasing premium on returns from risk and high-skilled labor ushered in by technological disruption and the feedback loop of elite talent working to increase their own productivity—a logical outcome when properly trained talent constrains growth.

What explains high returns to success and slowing productivity growth?

Core argument: The chapter argues that information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics relieved constraints on low-skilled labor and risk-averse savings.

The advent of information technology opened a window of investment opportunities that has exceeded the supply of properly trained talent while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics have relieved constraints to low-skilled labor and risk-averse savings. As the economy devotes more resources to raising the productivity of talent, low-skilled productivity and wage growth have slowed. With a constrained supply of risk-reducing talent allocated to more productive endeavors, an unconstrained supply of risk-averse savings has lowered interest rates. With improbable innovation needed to capitalize on the value of information, high returns to success have fortunately motivated increased risk-taking, despite the declining productivity of innovators. Proponents of income redistribution have concluded that high returns to success and slowing productivity growth, despite low interest rates, are evidence of rising cronyism, notwithstanding extensive evidence to the contrary. This chapter provides an alternative explanation.

Takeaways by Macro Roundup® AI

  1. The chapter argues that information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics relieved constraints on low-skilled labor and risk-averse savings.
  2. As the economy devotes more resources to raising the productivity of talent, low-skilled productivity and wage growth have slowed, while an unconstrained supply of risk-averse savings paired with constrained risk-reducing talent has lowered interest rates.
  3. Proponents of income redistribution treat high returns to success and slowing productivity growth alongside low interest rates as evidence of rising cronyism, a conclusion the chapter disputes as contrary to extensive evidence.

Related Articles:

  • Perspectives on the Labor Share — The share of US income going to labor reached its lowest level since the Great Depression, falling roughly 5 percentage points between 1929 and 2022 across most industries, alongside a worldwide decline of about 6 percentage points since 1980. The author argues the most plausible causes are technological, including capital-augmenting technology.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • Are We on the Brink of an AI Investment Arms Race? — Spending on AI chips and data centers was a bit below $100bn in 2023, around 0.4% of US GDP, and the broader set of companies exposed to AI-related investment has not yet seen a major jump in sales. The authors argue the underlying dynamics point to a spending surge large enough to shape the business cycle.

Tuesday, January 5, 2021

AI Summary. Earth's climate remained stable enough to sustain life over billions of years because of chance rather than predictable self-regulating factors, according to this account. That long-run habitability underpins ecosystem services valued at an estimated $125tn a year and global economic output.

Joe Mellor The London Economic
Date Posted:
Is Database:
Database

A stable climate has allowed for complex ecosystems & economies valued at $125tn annually in ecosystem services. Earth’s habitability underpins global GDP, projected to reach $105tn by 2023.

Is Earth's long-run habitability the result of chance rather than self-regulation?

Core argument: Earth's climate stability over billions of years is attributed to fortuitous circumstances rather than predictable factors.

Earth's stable climate over billions of years, crucial for sustaining life, is attributed to fortuitous circumstances rather than predictable factors. This stability has allowed for the development of complex ecosystems and economies, which are now valued at an estimated $125tn annually in ecosystem services. The economic implications are profound, as the Earth's habitability underpins global GDP, projected to reach $105tn by 2023. The unpredictable nature of Earth's climate stability highlights the importance of investing in sustainable practices and technologies to mitigate risks associated with climate change. Policymakers and business leaders must consider these factors when planning for long-term economic growth and stability, ensuring that the luck that has favored Earth's habitability is complemented by strategic human intervention.

Takeaways by Macro Roundup® AI

  1. Earth's climate stability over billions of years is attributed to fortuitous circumstances rather than predictable factors.
  2. Ecosystem services are valued at an estimated $125tn annually, while global GDP is projected to reach $105tn by 2023.
  3. The unpredictable nature of Earth's climate stability underscores the case for investing in sustainable practices and technologies to mitigate climate change risks in long-term economic planning.

Study suggests that Earth’s habitability dude to luck"....Planet Earth has remained habitable for billions of years simply because of good luck, according to A study....“To put it another way, if an intelligent observer had been present on the early Earth as life first evolved, and was able to calculate the chances of the planet staying habitable for the next several billion years, the calculation may well have revealed very poor odds.”..."

Joe Mellor, "Earth remained habitable for billions of years ‘because of good luck’,"The London Economic, January 2, 2020, https://www.thelondoneconomic.com/news/science/earth-remained-habitable-for-billions-of-years-because-of-good-luck/02/01/