Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…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
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, September 28, 2021

AI Summary. Analysis of patent data covering 97.2% of US patents estimates an average technological improvement rate of 19% per year with a standard deviation of 26%, and finds over 80% of technologies improve at less than 25% annually. Mechanical and "other" domains improve slowly, while computer, communications, electrical and electronics domains fall in the fastest-improving quartiles.

Anuraag Singha, Giorgio Triulzib and Christopher Magee Research Policy
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80% of technologies improve at <25% a year.

How fast do technologies improve across different domains?

Core argument: Patent-based estimates find over 80% of technologies improve at less than 25% per year, with a mean improvement rate of 19% annually and a standard deviation of 26%, suggesting a skewed distribution.

Analysis of patent data reveals that technological progress is generally steady, with over 80% of technologies improving at less than 25% per annum. The average improvement rate is 19% per year, with a standard deviation of 26%. This suggests a skewed distribution, where most domains, particularly in Mechanical and Other categories, improve slowly. In contrast, Computer & Communications and Electrical & Electronics domains are often in the fastest improving quartiles. The study covers 97.2% of all patents in the US system, indicating that while some domains like software and algorithms show rapid advancements, the majority of technologies progress at a moderate pace, supporting the notion of steady technological evolution.

Takeaways by Macro Roundup® AI

  1. Patent-based estimates find over 80% of technologies improve at less than 25% per year, with a mean improvement rate of 19% annually and a standard deviation of 26%, suggesting a skewed distribution.
  2. Most Mechanical and Other technology domains improve slowly, while Computer & Communications and Electrical & Electronics domains often fall in the fastest-improving quartiles.
  3. The analysis covers 97.2% of all patents in the US patent system.

Anuraag Singha, Giorgio Triulzib and Christopher Magee, “Technological improvement rate predictions for all technologies: Use of patent data and an extended domain description, Research Policy, https://www.sciencedirect.com/science/article/pii/S0048733321000950

Software is eating the world (or at least improving more rapidly than other sectors), “…While most domains are indeed slow, we also find some very fast domains in the dataset. Table 2 identifies the 10 fastest improving domains. The domains are identified by the Domain code- a portmanteau of the UPC code and IPC code of the underlying overlapped classes. The predicted improvement rate (predicted K) i.e. the values from Eq. (2) are also given along with the domain size i.e. the number of patents (after deduplication). The predicted rates of improvement are reported as percentage change per annum. Table 2 shows very little diversity among technologies with most encompassing software improvements as an essential part of the domain. Interestingly, there is also little diversity among the slowest domains. The slowest domains are mostly related to simple mechanisms such as hitches, gauges, batons, hangers, cowls, hammocks etc. Please see Appendix H for the list of identified fastest 20 and slowest 20 domains…”

Improvement rates are not uniformly distributed across and within categories,”…Fig. 3 reports the distribution of domains by category, broken down, for each category, by quartile of the overall distribution of improvement rates across all domains. If improvement rates would be uniformly distributed across categories and within categories, we would observe that each quartile bar would have the same height (i.e., same number of domains) for all categories. In other words, we would see 24 bars of the same height. In contrast, we see very large differences in number of domains across quartiles within categories. Computer & Communications domains are predominantly found in the fastest improving quartile of the overall distribution. Similarly, Electrical & Electronics domains are mostly found in the top two quartiles. Chemical domains are concentrated in the middle two quartiles, while Mechanical and Others are mostly found in the slower quartiles. Drugs & Medical domains are more uniformly distributed across all quartiles, meaning that there is roughly equal probability of finding fast and slow domains in this category….”

Most technologies improve moderately or slowly, “…More than 83% of the technological domains are improving at a rate of less than 25% per annum and more than two-thirds of the domains are improving at a rate less than 15% per annum. Performance for the average technology improves at a rate of 19% per annum, with a standard deviation of 26% per annum. Fig. 2 shows the distribution of the predicted improvement rate values for the 1757 domains and the best fit for the probability density function. The distribution is very skewed and its best fit is log-normal with shape, location and scale parameters respectively equal to 0.95, 1.92 and 9.90….”

Core findings

Using evidence from patents a paper finds technology seems to improve at a steady state, “…In this work, we provide predicted yearly performance improvement rates for nearly all definable technologies for the first time. We do this by creating a correspondence of all patents within the US patent system to a set of 1757 technology domains. A technology domain is a body of patented inventions achieving the same technological function using the same knowledge and scientific principles. These domains contain 97.2% of all patents within the entire US patent system. From the identified patent sets, we calculated the average centrality of the patents in each domain to predict their improvement rates, following a patent network-based methodology tested in prior work. They vary from a low of 2% per year for the Mechanical Skin treatment- Hair Removal and wrinkles domain to a high of 216% per year for the Dynamic information exchange and support systems integrating multiple channels domain, but more that 80% of technologies improve at less than 25% per year. Fast improving domains are concentrated in a few technological areas. The domains that show improvement rates greater than the predicted rate for integrated chips, from Moore’s law, are predominantly based upon software and algorithms. In addition, the rates of improvement were not a strong function of the patent set size….”

Ed Comment, “But I didn’t find it as convincing as I hoped. One component of innovation is the exogenous given terrain of opportunity, whose difficulty of advancement ebbs and flows. Another constrain is properly trained talent, which can takes decades to train. But a real model has to explain America’s outsized success. Theirs doesn’t.”

Thursday, September 30, 2021

AI Summary. Fossil fuels supplied 81% of global energy, and the International Energy Agency forecasts they will still provide 73% by 2040 even if countries meet their climate targets. Renewables mainly generate electricity, which is only 19% of global energy consumption, with the rest used for heating, transportation, and industrial production.

Bjorn Lomborg Wall Street Journal
Date Posted:
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IEA forecasts fossil fuels will supply 73% of global energy in 2040, even if countries meet their climate targets, up from 81% in 2019.

Can renewables displace fossil fuels when electricity is a small share?

Core argument: Fossil fuels supplied 81% of global energy in 2019, and the IEA forecasts they will still provide 73% by 2040 even if countries meet their climate targets.

In 2019, fossil fuels accounted for 81% of the global energy supply, and even if countries meet their climate targets, the International Energy Agency (IEA) forecasts that fossil fuels will still provide 73% of energy by 2040. This is because renewables primarily generate electricity, which constitutes only 19% of global energy consumption, with the rest used for heating, transportation, and industrial production. Despite the growth of solar and wind, they contribute just 8% to electricity generation, while fossil fuels still dominate at nearly two-thirds. The European Union, leading in renewable electricity at 17%, also faces high consumer costs due to the need for backup power from fossil fuels. Africa, with nearly half its energy from renewables like wood and dung, highlights the challenge of transitioning to cleaner energy without increasing fossil fuel use as economic development progresses. Reducing fossil fuel reliance rapidly is daunting, as seen during the 2020 pandemic when emissions fell but not enough to meet Paris climate goals.

Takeaways by Macro Roundup® AI

  1. Fossil fuels supplied 81% of global energy in 2019, and the IEA forecasts they will still provide 73% by 2040 even if countries meet their climate targets.
  2. Solar and wind generate just 8% of global electricity while fossil fuels supply nearly two-thirds, and electricity itself accounts for only 19% of global energy consumption, with the rest going to heating, transportation, and industrial production.
  3. The European Union leads in renewable electricity at 17% and faces high consumer costs from the need for fossil-fuel backup power, while Africa draws nearly half its energy from renewables such as wood and dung.

“…In 2019, the latest complete year of data, 81% of the world’s energy supply came from fossil fuels, according to the International Energy Agency. Even if all nations were to fulfill their current climate promises, the IEA estimates that fossil-fuel use would still make up 73% by 2040. How can this be possible when headlines constantly trumpet the future of solar and wind? Partly, it’s that renewables produce mostly electricity, which is only 19% of all the energy the world consumes. The rest is used for things like heating, transportation and the production of goods like steel and fertilizer. Even if all electricity turned green, most of the world would still run on fossil fuels…”

Bjorn Lomborg, "Want to Lock Down for the Climate?"Wall Street Journal, September 30, 2021, https://www.wsj.com/articles/covid-lockdown-climate-fossil-fuels-electricity-energy-production-africa-carbon-emission-11632943155

Want to Lock Down for the Climate?

Want to Lock Down for the Climate?: Extended Excerpt Image 1


From the news to late-night shows, much of the media makes it sound as if renewables are on the verge of taking over. But that’s far from reality. In 2019, the latest complete year of data, 81% of the world’s energy supply came from fossil fuels, according to the International Energy Agency. Even if all nations were to fulfill their current climate promises, the IEA estimates that fossil-fuel use would still make up 73% by 2040.

How can this be possible when headlines constantly trumpet the future of solar and wind? Partly, it’s that renewables produce mostly electricity, which is only 19% of all the energy the world consumes. The rest is used for things like heating, transportation and the production of goods like steel and fertilizer. Even if all electricity turned green, most of the world would still run on fossil fuels.

And most electricity isn’t green—almost two-thirds is still generated by fossil fuels, with nuclear and hydro supplying another quarter. The solar and wind favored by environmentalists generate only 8%. Though renewables are often touted as the cheapest energy source, it’s only true when the sun is shining and the wind is blowing. If it’s a still night you need backup power, typically from fossil fuels—which makes electricity costlier because you need to pay for both the solar panel and the gas turbine. The European Union, which gets 17% of its electricity from solar and wind—the highest percentage in the world—also has some of the highest consumer electricity costs.

In fossil-fuel use, the greenest continent is Africa. Nearly half of its energy comes from renewables, mostly wood, dung, and cardboard burned for cooking and heating—which kills about 700,000 people a year in sub-Saharan Africa with indoor air pollution. More than half a billion Africans lack access to electricity. Economic development can move them out of this unenviable position, but it’ll also mean Africans will use significantly more fossil fuels than they do today. To give a sense of how much it could grow: California uses more electricity on its pools and hot tubs than all 44 million inhabitants of Uganda consume in total.

Cutting fossil fuels as quickly as some environmentalists want will be tremendously difficult. In 2020 pandemic lockdowns forced the world to cut carbon emissions significantly. But to fulfill the Paris climate accords completely, the United Nations says that global emissions would have to plunge even further every year for the rest of the decade. In 2021 emissions would have to drop by more than double the lockdown-induced decline. By the end of 2030, they’d have to have fallen by 11 times what they did in 2020. Not exactly realistic.