Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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
  • “…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
  • “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
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, December 5, 2022

AI Summary. Interest-rate futures imply traders expect the Federal Reserve to lift its benchmark rate to about 5%, but one economist argues the peak could reach 6%, making 5% a poor best guess. He also argues against raising the 2% inflation target, citing credibility concerns after inflation was allowed to surge.

Chris Anstey Bloomberg
Date Posted:

.@LHSummers suggests that the Fed will need to boost rates by more than the futures market expectation of 5% by May 2023, vs. the current 3.75-4.0%. “6% is certainly a scenario we can write…five is not a good best-guess.” @bloomberg

.@LHSummers suggests that the Fed will need to boost rates by more than the futures market expectation of 5% by May 2023,...

Will the Fed need to raise rates higher than markets expect?

Core argument: Interest-rate futures price the Fed's benchmark reaching about 5% by May 2023, up from the current target range of 3.75% to 4%.

Interest-rate futures suggest traders expect the Fed to raise rates to about 5% by May 2023, compared with the current target range of 3.75% to 4%. “Six is certainly a scenario we can write,” Larry Summers said with regard to the peak percentage rate for the Fed’s benchmark. “And that tells me that five is not a good best-guess.” Summers reiterated that he didn’t think the Fed ought to change its inflation target to, say, 3% from the current 2% -- in part because of potential credibility issues after having allowed inflation to surge so high the past two years.

Takeaways by Macro Roundup® AI

  1. Interest-rate futures price the Fed's benchmark reaching about 5% by May 2023, up from the current target range of 3.75% to 4%.
  2. Larry Summers opposes raising the Fed's inflation target from 2% to 3%, citing in part potential credibility issues after inflation was allowed to surge over the past two years.

AI Summary. Aggregate weekly payrolls have been rising about 7% annually, up from about 4.5% before the pandemic. Wage growth can run 1–3 percentage points above or below consumer price growth, but larger gaps are historically rare, and U.S. wages exceeded price growth by at least 4 percentage points for two consecutive years only in 1941–1943.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein argues that 7% annualized growth in nominal employee pay, up from 4.5% before the pandemic, implies that inflation “will probably persist around 4-5% a year.”

Can wage growth greatly outpace price growth for long?

Core argument: U.S. aggregate weekly payrolls have risen about 7% annually since the start of this year with minimal variation, up from roughly 4.5% annually before the pandemic.

Aggregate weekly payrolls has been rising about 7% annually since the beginning of this year, with minimal variation.  That’s up from about 4.5% a year before the pandemic. Wages can rise 1-3 percentage points faster or slower than consumer prices for a variety of reasons—including but not limited to compositional and definitional differences—but larger gaps between the growth rates of wages and prices basically don’t exist outside of WWII and Korean War rationing, the late 1990s productivity boom, and the first year of the pandemic. The only time U.S. wages rose at least 4 percentage points faster than prices for at least two years in a row was 1941-1943.

Takeaways by Macro Roundup® AI

  1. U.S. aggregate weekly payrolls have risen about 7% annually since the start of this year with minimal variation, up from roughly 4.5% annually before the pandemic.
  2. Wage growth can run 1–3 percentage points faster or slower than consumer price growth for reasons including compositional and definitional differences, but larger gaps have occurred only during WWII and Korean War rationing, the late 1990s productivity boom, and the pandemic's first year.
  3. The only stretch in which U.S. wages rose at least 4 percentage points faster than prices for at least two consecutive years was 1941–1943.

AI Summary. Modest positive inflation makes relative price and wage adjustments easier, since cutting prices or wages outright is difficult and rising prices elsewhere can accomplish the same shift. On this basis, some economists argue it is acceptable to stop disinflation at a 3% inflation rate rather than 2%.

Paul Krugman Krugman Wonks Out
Date Posted:

.@paulkrugman agrees with @ojblanchard1’s case for an inflation target of 3% vs. 2%, perhaps without officially announcing the policy.

.@paulkrugman agrees with @ojblanchard1’s case for an inflation target of 3% vs. 2%, perhaps without officially announcing...

Is stopping disinflation at 3% instead of 2% acceptable?

Core argument: The author sides with Blanchard and others in arguing it is acceptable to stop disinflation at 3% inflation, possibly without admitting it.

Many economists believe that a little bit of inflation helps to “lubricate” the economy. An ever-changing economy often requires that prices of some goods (and wages for some workers) fall relative to prices and wages elsewhere. But price and wage cuts are hard to achieve. If the price of widgets needs to fall relative to the price of gizmos, it’s easier to do this with rising gizmo prices rather than falling widget prices, so adjustment is easier if overall inflation is somewhat positive. On the other hand, there’s a lot to be said for more or less stable prices, and in particular for an inflation rate low enough that people don’t have to think about it much. I’m with Blanchard and others in believing that it’s OK to stop at 3, maybe without admitting that we’re doing it.

Takeaways by Macro Roundup® AI

  1. The author sides with Blanchard and others in arguing it is acceptable to stop disinflation at 3% inflation, possibly without admitting it.
  2. Many economists hold that mildly positive inflation "lubricates" the economy, since relative price and wage adjustments are easier through faster increases elsewhere than through outright cuts, which are hard to achieve.
  3. The case for low inflation rests on the value of more or less stable prices, with inflation low enough that people need not think about it much.

AI Summary. About half of global trade is invoiced in US dollars despite the United States accounting for just over a tenth of global trade, a share that has hardly changed in recent years. The dollar's role in official foreign exchange reserves has shrunk to under 60%, one of the lowest shares in two decades and below the 65% period average.

BIS Staff Bank for International Settlements
Date Posted:

Half of global trade is invoiced in dollars despite the United States accounting for just 10% of the trade. The dollar’s role in official foreign exchange reserves has declined to less than 60%, well under its 20-year mean of 65%. @BIS_org

Is the dollar's dominance in trade invoicing holding while reserve share declines?

Core argument: About half of global trade is invoiced in USD even though the United States accounts for just over a tenth of global trade, with the invoicing share varying widely across regions.

Approximately half of global trade is invoiced in USD, although this share varies widely across regions. This disproportionately large reliance on the USD is in spite of the United States accounting for just over a 10th of global trade. These shares have hardly changed since 2019. One area where the role of the USD has been shrinking to some degree is official foreign exchange reserves, even though it remains the foremost reserve currency. As of the second quarter of 2022, the USD accounted for less than 60% of official foreign exchange reserves. This is one of the lowest shares in the past 20 years and is well below the average of 65% for the period.

Takeaways by Macro Roundup® AI

  1. About half of global trade is invoiced in USD even though the United States accounts for just over a tenth of global trade, with the invoicing share varying widely across regions.
  2. The USD accounted for less than 60% of official foreign exchange reserves as of the second quarter of 2022, one of the lowest shares in the past 20 years and below the 65% average for the period.
  3. USD shares of global trade invoicing have hardly changed since 2019, and the USD remains the foremost reserve currency despite its shrinking share of official foreign exchange reserves.

AI Summary. US policy encouraging companies to shift supply chains toward allied countries and away from China has coincided with increased trade between the US and its traditional European allies. Semiconductor companies are projected to spend more than $110bn over five years building new fabrication plants outside China.

Bryce Baschuk Bloomberg
Date Posted:

The United States is now importing more goods from Europe than from China. @bloomberg

Are geopolitical rivalries shifting supply chains toward allied countries?

Core argument: Semiconductor companies will collectively spend more than $110 billion over five years building fabrication plants outside of China.

As the pandemic snarled global supply chains, US policymakers urged companies to look at ways to reinforce their supply chains and reduce American economic dependence on China and other authoritarian regimes. The Biden administration’s push toward “friend-shoring” production and manufacturing has steadily resulted in increased US trade between the US and its traditional allies in Europe. Over the next five years semiconductor companies will collectively spend more than $110 billion building new semiconductor fabrication plants outside of China.

Takeaways by Macro Roundup® AI

  1. Semiconductor companies will collectively spend more than $110 billion over five years building fabrication plants outside of China.
  2. The Biden administration's push toward "friend-shoring" production and manufacturing has steadily increased US trade with traditional US allies in Europe.
  3. US policymakers, after the pandemic snarled global supply chains, urged companies to reinforce those supply chains and reduce American economic dependence on China and other authoritarian regimes.

AI Summary. Apple has accelerated plans to shift some production out of China, telling suppliers to plan for assembling products elsewhere in Asia, particularly India and Vietnam, and seeking to reduce dependence on Taiwanese assemblers led by Foxconn. Advisers note Vietnam lacks workers for the largest sites and India lacks consistent rules.

Yang Jie and Aaron Tilley Wall Street Journal
Date Posted:

Apple will have problems moving higher-end iPhone production to Vietnam as the former lacks China’s scale of potential workers, and India is a very difficult business environment for imports and exports. @WSJ

Apple will have problems moving higher-end iPhone production to Vietnam as the former lacks China’s scale of potential...

Can major electronics makers shift production from China to other Asian countries?

Core argument: Apple has accelerated plans to shift some production outside China, telling suppliers to plan more actively for assembling products elsewhere in Asia, particularly India and Vietnam, and seeking to reduce dependence on Taiwanese assemblers led by Foxconn.

In recent weeks, Apple has accelerated plans to shift some of its production outside China. It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, they say, and looking to reduce dependence on Taiwanese assemblers led by Foxconn. Dan Panzica, a former Foxconn executive who now advises companies on supply-chain issues, said Vietnam’s manufacturing was growing quickly but was short of workers. The country has just under 100 million people, less than a 10th of China’s population. It can handle 60,000-person manufacturing sites but not places such as Zhengzhou that reach into the hundreds of thousands, he said. “They’re not doing high-end phones in India and Vietnam,” said Mr. Panzica. “No other places can do them. India is the Wild West in terms of consistent rules and getting stuff in and out.”

Takeaways by Macro Roundup® AI

  1. Apple has accelerated plans to shift some production outside China, telling suppliers to plan more actively for assembling products elsewhere in Asia, particularly India and Vietnam, and seeking to reduce dependence on Taiwanese assemblers led by Foxconn.
  2. Vietnam's population of just under 100 million is less than a tenth of China's, and former Foxconn executive Dan Panzica said the country can handle 60,000-person manufacturing sites but not places such as Zhengzhou that reach into the hundreds of thousands.
  3. Dan Panzica said high-end phones are not being made in India or Vietnam and no other places can do them, describing India as "the Wild West in terms of consistent rules and getting stuff in and out.".

AI Summary. U.S. Border Patrol agents made roughly 127,000 arrests of illegal border crossers over a three-week period, mainly Mexicans, Cubans, and Nicaraguans, with a public-health expulsion authority applied to about 32% and the rest allowed to remain and pursue asylum claims. Officials are weighing a rule denying asylum to migrants who transited another country without applying there first.

Ban Michelle Hackman Wall Street Journal
Date Posted:

Biden is considering adopting a 2019 Trump policy to deny asylum to migrants if they failed to apply for asylum in countries they had moved through, such as Mexico, on their way to the American border. @WSJ

Biden is considering adopting a 2019 Trump policy to deny asylum to migrants if they failed to apply for asylum in countries...

Will the U.S. deny asylum to migrants who transited another country?

Core argument: Border Patrol agents made roughly 127,000 arrests of illegal border crossers in the first three weeks of November, primarily Mexicans, Cubans, and Nicaraguans, according to internal government data viewed by The Wall Street Journal.

Through the first three weeks of November, Border Patrol agents made roughly 127,000 arrests of people crossing the border illegally, according to internal government data viewed by The Wall Street Journal, primarily of Mexicans, Cubans, and Nicaraguans. The administration was able to use Title 42 against roughly 32% of those crossing, with the rest allowed to remain in the country and pursue asylum claims. The ban under discussion would prevent migrants from winning asylum in the U.S. if they moved through another country, such as Mexico, on the way and didn’t first apply for asylum in that country. The policy would be issued, so it would take effect in conjunction with the end of Title 42.

Takeaways by Macro Roundup® AI

  1. Border Patrol agents made roughly 127,000 arrests of illegal border crossers in the first three weeks of November, primarily Mexicans, Cubans, and Nicaraguans, according to internal government data viewed by The Wall Street Journal.
  2. The Biden administration applied Title 42 to roughly 32% of those crossing the border, with the remainder allowed to stay in the U.S. and pursue asylum claims.
  3. The asylum ban under discussion would bar migrants from winning U.S. asylum if they transited another country, such as Mexico, without first applying for asylum there, and would take effect alongside the end of Title 42.

AI Summary. NATO members' defense ministries are finding that dormant weapons production lines cannot be restarted quickly, and that expanding capacity requires investment that depends on securing long-term production contracts. These countries had cut military spending, downsized defense industries, and shifted to lean "just-in-time" production with low inventories of munitions and other equipment.

John Paul Rathbone, Sylvia Pfeifer, and Steff Chávez Financial Times
Date Posted:

The demands of the Ukraine war have significantly stressed the West’s defense industrial base. Increasing capacity will require investments supported by long-term production contracts, vs. the “just in time” model adopted after the Cold War era. @ft

The demands of the Ukraine war have significantly stressed the West’s defense industrial base. Increasing capacity will...

Can Western defense industries quickly expand weapons production capacity?

Core argument: William LaPlante, the Pentagon's chief weapons buyer, told a George Mason University conference that Ukraine has focused attention on what matters, saying "What matters is production. Production really matters.".

“Ukraine has focused us . . . on what really matters. ” William LaPlante, the Pentagon’s chief weapons buyer, told a recent conference at George Mason University. “What matters is production. Production really matters.” NATO members’ defense ministries are discovering that dormant weapons production lines cannot be switched on overnight. Increasing capacity requires investment which, in turn, depends on securing long-term production contracts. Since the end of the cold war, these countries have reaped a peace dividend by slashing military spending, downsizing defense industries, and moving to lean, “just-in-time” production and low inventories of equipment such as munitions.

Takeaways by Macro Roundup® AI

  1. William LaPlante, the Pentagon's chief weapons buyer, told a George Mason University conference that Ukraine has focused attention on what matters, saying "What matters is production. Production really matters.".
  2. NATO members' defense ministries are finding that dormant weapons production lines cannot be switched on overnight, since increasing capacity requires investment that depends on securing long-term production contracts.
  3. Since the end of the cold war, NATO countries have reaped a peace dividend by slashing military spending, downsizing defense industries, and shifting to lean "just-in-time" production with low inventories of equipment such as munitions.

AI Summary. China has long used credit expansion to stabilize its economy, with stimulus during the global financial crisis reaching 25% of Chinese GDP. As China's weight in the world economy has grown, its credit policies have become globally significant, with each of its last three stimulus episodes equal to about 1.5% of global GDP.

William Barcelona, Danilo Cascaldi-Garcia, et al Federal Reserve Board
Date Posted:

New research from @FederalReserve quantifies the likely spillovers from the three rounds of Chinese stimulus, which each accounted for 1.5% of global GDP

Do China's credit stimulus episodes now move the global economy?

Core argument: China's credit impulse during the global financial crisis reached 25% of Chinese GDP, standing out as a period of massive credit stimulus among the country's repeated uses of credit to stabilize its economy.

Panel A in figure 1 illustrates the credit impulse as a share of China’s GDP. It highlights that the Chinese authorities have long used credit to stabilize the economy as they have long faced a tradeoff between strong economic growth and financial stability objectives. That said, the GFC stands out as a period of massive credit stimulus, amounting to 25% of GDP. To size China’s credit measures in a global context, panel B in figure 1 illustrates China’s credit impulse as a share of global GDP. It shows that prior to the GFC, China’s credit measures represented a small share of global GDP. However, with China’s rise in the global economy, the quantitative importance of China’s credit policies has risen as well. Indeed, China’s last three stimulus episodes each accounted for around 1.5% of global GDP.

Takeaways by Macro Roundup® AI

  1. China's credit impulse during the global financial crisis reached 25% of Chinese GDP, standing out as a period of massive credit stimulus among the country's repeated uses of credit to stabilize its economy.
  2. China's last three stimulus episodes each accounted for around 1.5% of global GDP, up from a small share before the global financial crisis, as China's weight in the world economy rose.
  3. Chinese authorities have long faced a tradeoff between strong economic growth and financial stability objectives, and have long used credit to stabilize the economy.

AI Summary. European Union gas demand ran 24% below its five-year average, according to provisional data from commodity analytics firm ICIS, even as temperatures fell. The decline is evidence the bloc is reducing its reliance on Russian energy.

Shotaro Tani Financial Times
Date Posted:

Germany cut its gas demand by 23% in November even as temperatures fell, with the EU cutting demand by 24% overall. @FT

Is Europe reducing its reliance on Russian gas?

Core argument: EU gas demand in November ran 24% below the five-year average, according to provisional data from commodity analytics company ICIS, even as temperatures fell.

EU countries cut gas demand by a quarter in November even as temperatures fell, in the latest evidence that the bloc is succeeding in reducing its reliance on Russian energy since Moscow’s full-scale invasion of Ukraine. Provisional data from commodity analytics company ICIS showed gas demand in the EU was 24% below the five-year average last month, following a similar fall in October.

Takeaways by Macro Roundup® AI

  1. EU gas demand in November ran 24% below the five-year average, according to provisional data from commodity analytics company ICIS, even as temperatures fell.
  2. The November drop in EU gas demand followed a similar fall in October, taken as evidence the bloc is succeeding in reducing its reliance on Russian energy since Moscow's full-scale invasion of Ukraine.

Tuesday, December 6, 2022

AI Summary. The US money supply has fallen 1.5% from a record high of $21.7tn, but Yardeni Research estimates it remains at least $2tn above its pre-pandemic trendline. The year-over-year change in the money supply has moved nearly in lockstep with the 12-month sum of the personal saving rate, with growth stalling as Americans stopped accumulating new savings.

John Authers Bloomberg
Date Posted:

M2 has declined 1.5% since peaking at a record $21.7T in March, but Yardeni Research estimates that November M2 remains at least $2T above its pre-pandemic trendline. @johnauthers @bloomberg

Does excess money supply still cushion US consumer spending?

Core argument: M2 money supply has fallen 1.5% since peaking at a record $21.7 trillion in March, a drop Yardeni Research calls unprecedented.

How much money is still sitting ready to spend in consumers’ bank accounts? As Yardeni Research points out, some economists are worried about M2’s decline. It has fallen 1.5% since peaking at a record high of $21.7 trillion in March. Although that followed a record peak, such a drop is unprecedented. Still, the firm’s founder, Ed Yardeni, thinks that supply remains at least $2 trillion above its pre-pandemic trendline. The year-over-year change in M2, in fact, has been moving in near lockstep with the 12-month sum of the personal saving rate; money supply has stopped rising as Americans have stopped accumulating new savings. Thus, for Yardeni, the recent weakness reflects the excess liquidity accumulated by US consumers since the start of the pandemic.

Takeaways by Macro Roundup® AI

  1. M2 money supply has fallen 1.5% since peaking at a record $21.7 trillion in March, a drop Yardeni Research calls unprecedented.
  2. Ed Yardeni estimates the money supply remains at least $2 trillion above its pre-pandemic trendline, reflecting excess liquidity accumulated by US consumers since the start of the pandemic.
  3. The year-over-year change in M2 has moved in near lockstep with the 12-month sum of the personal saving rate, with money supply ceasing to rise as Americans stopped accumulating new savings.

AI Summary. Digital assets were priced at an unrealistic premium to physical ones during the stimulus era, and with monetary and fiscal policy normalizing after the longest stretch of negative real interest rates since 1820 and the largest deficits since 1800 outside the world wars, physical-economy assets are outperforming "innovation" stocks.

Michael Cembalest J.P. Morgan
Date Posted:

Michael Cembalest at JP Morgan notes that its basket of farm equipment, office cleaning supplies, and industrial REITs is now outpacing “innovation” stocks. @jpmorgan

Are physical-economy assets outperforming innovation stocks as policy normalizes?

Core argument: Cembalist notes the longest stretch of negative real interest rates since 1820 and the largest fiscal deficits since 1800 outside WWI and WWII, with monetary and fiscal policy now normalizing.

During the stimulus bonanza, digital assets were priced at an unrealistic premium relative to physical ones. Monetary and fiscal policy are normalizing now after the longest period of negative real interest rates since 1820 and the largest fiscal deficits since 1800 (other than during WWI and WWII), so Cembalist is not surprised to see a basket of farm equipment, office cleaning supplies and industrial REITs finally outperforming “innovation” stocks.

Takeaways by Macro Roundup® AI

  1. Cembalist notes the longest stretch of negative real interest rates since 1820 and the largest fiscal deficits since 1800 outside WWI and WWII, with monetary and fiscal policy now normalizing.
  2. During the stimulus bonanza, digital assets were priced at an unrealistic premium relative to physical assets, according to Cembalist.
  3. A basket of farm equipment, office cleaning supplies and industrial REITs is outperforming "innovation" stocks, an outcome Cembalist says does not surprise him given policy normalization.

AI Summary. Taiwan Semiconductor Manufacturing Co. says it will more than triple its US investment to $40bn, expanding in Arizona where it is building a $12bn chip facility. The added plant is set to begin operating by 2026 and would be the first in the US to make 3-nanometer chips, the most advanced currently available.

Cheng Ting-Fang Nikkei Asia
Date Posted:

TSMC is expanding its investment in Arizona, building a plant that will manufacture 3- nanometers chips which are the most advanced currently under production. @NikkeiAsia

TSMC is expanding its investment in Arizona, building a plant that will manufacture 3- nanometers chips which are the most...

Will the most advanced chip production come to the US?

Core argument: TSMC will more than triple its U.S. investment to $40 billion, expanding from the $12 billion Arizona facility now under construction to fund a second, more advanced plant at the same site.

Taiwan Semiconductor Manufacturing Co. says it will more than triple its investment in the US to $40 billion and bring the world’s most advanced chip production technology to the country by 2026, in a victory for Washington’s push to onshore vital parts of the semiconductor supply chain. TSMC, the world’s biggest contract chipmaker, announced on Tuesday it will increase its investment in Arizona, where it is currently building a $12 billion chip facility, to $40 billion in order to build a second, even more, advanced plant there. The additional facility will begin operation by 2026 and will be the first plant in the US to make 3-nanometer chips, the most advanced currently available.

Takeaways by Macro Roundup® AI

  1. TSMC will more than triple its U.S. investment to $40 billion, expanding from the $12 billion Arizona facility now under construction to fund a second, more advanced plant at the same site.
  2. TSMC's additional Arizona plant will begin operation by 2026 and will be the first U.S. facility to make 3-nanometer chips, the most advanced currently available.
  3. TSMC's plan to bring the world's most advanced chip production technology to the United States by 2026 is a victory for Washington's push to onshore vital parts of the semiconductor supply chain.

AI Summary. Japan has ordered a defense budget of about 43tn yen ($315bn) for a five-year period, up 57% from the 27tn yen initially budgeted for the prior five years, bringing its spending near Russia's levels. The funds are set to go toward stockpiling missiles capable of striking military assets in Russia, China, and North Korea.

Isabel Reynolds Bloomberg
Date Posted:

Japan is on pace to increase defense spending by 57% over the next five years to near the levels spent by Russia. This would raise defense spending to 2% of GDP, the NATO target. @bloomberg

Japan is on pace to increase defense spending by 57% over the next five years to near the levels spent by Russia. This would...

Is Japan raising defense spending toward Russia's level?

Core argument: Japanese Prime Minister Fumio Kishida instructed ministers to prepare a defense budget of about ¥43tn ($315bn) for the five-year period starting in April, up 57% from the ¥27tn initially budgeted for the current five-year period.

Japanese Prime Minister Fumio Kishida has ordered a sharp defense spending hike that could see his long-pacifist country’s defense budget balloon to near the levels spent by Russia. Kishida instructed ministers to put together a budget of about 43 trillion yen ($315 billion) for the five-year period starting in April, Defense Minister Yasukazu Hamada said Monday. That’s up 57% on the 27 trillion yen initially budgeted for the current five-year period. The money is set to be used for items such as stockpiling missiles that are capable of striking military assets in neighbors Russia, China, and North Korea. Another goal over the next 10 years would be to triple the number of military units equipped with ballistic missile interceptors in a southwestern island chain that stretches toward Taiwan.

Takeaways by Macro Roundup® AI

  1. Japanese Prime Minister Fumio Kishida instructed ministers to prepare a defense budget of about ¥43tn ($315bn) for the five-year period starting in April, up 57% from the ¥27tn initially budgeted for the current five-year period.
  2. Japan's planned defense spending could bring the long-pacifist country's budget near the levels spent by Russia, with funds set for items such as stockpiling missiles capable of striking military assets in Russia, China, and North Korea.
  3. Japan aims over the next 10 years to triple the number of military units equipped with ballistic missile interceptors in a southwestern island chain stretching toward Taiwan, according to Defense Minister Yasukazu Hamada.

AI Summary. The US has proposed selling Taiwan up to 100 advanced Patriot Pac-3 Missile Segment Enhancement air-defense missiles, along with radar, launcher modification kits, trainers, and software upgrades, in a deal valued at $882m.

Anthony Capaccio Bloomberg
Date Posted:

The US has proposed selling as many as 100 of its most advanced Patriot air-defense missiles to Taiwan in a deal valued at $882M @bloomberg

The US has proposed selling as many as 100 of its most advanced Patriot air-defense missiles to Taiwan in a deal valued at...

Is the US selling Taiwan more advanced Patriot air-defense missiles?

Core argument: The US has proposed selling Taiwan as many as 100 Lockheed Martin Patriot PAC-3 "Missile Segment Enhancement" hit-to-kill missiles plus radar and support equipment in a deal valued at $882 million, according to a State Department notice obtained by Bloomberg News.

The US has proposed selling Taiwan as many as 100 of its most advanced Patriot air-defense missiles along with radar and support equipment in a deal valued at $882 million, according to a State Department notice obtained by Bloomberg News. The new proposal calls for as many as 100 of Lockheed Martin Corp.’s hit-to-kill Patriot Pac-3 “Missile Segment Enhancement” missiles that are more advanced than earlier Patriots sent to Taiwan. The proposal also calls for M903 Launcher modification kits, missile round trainers, and software upgrades to accommodate the new missiles.

Takeaways by Macro Roundup® AI

  1. The US has proposed selling Taiwan as many as 100 Lockheed Martin Patriot PAC-3 "Missile Segment Enhancement" hit-to-kill missiles plus radar and support equipment in a deal valued at $882 million, according to a State Department notice obtained by Bloomberg News.
  2. The proposed PAC-3 MSE missiles are more advanced than earlier Patriots sent to Taiwan.
  3. The proposed package also includes M903 launcher modification kits, missile round trainers, and software upgrades to accommodate the new missiles.

AI Summary. Global supply chain pressures increased moderately, with Chinese delivery times the largest contributing factor even as US delivery times and Taiwanese purchases improved. The Global Supply Chain Pressure Index's recent movements suggest developments in Asia are slowing the index's return to historical levels.

FRBNY Staff Federal Reserve Bank Of New York
Date Posted:

The @NewYorkFed Global Supply Chain Pressure Index increased slightly in November to 1.1 from 1.0 in October, driven by Chinese delivery times. The index remains far below its peak of 4.3 in December 2021.

Are developments in Asia slowing the normalization of global supply chain pressures?

Core argument: The Global Supply Chain Pressure Index rose moderately in November, continuing October's increase but at a lower rate.

Global supply chain pressures increased moderately in November, continuing a trend seen in October, albeit at a lower rate. The largest contributing factor to the rise in supply chain pressures was Chinese delivery times, though improvements were shown in US delivery times and Taiwanese purchases. The GSCPI’s recent movements suggest that developments in Asia are slowing down the return of the index back to historical levels.

Takeaways by Macro Roundup® AI

  1. The Global Supply Chain Pressure Index rose moderately in November, continuing October's increase but at a lower rate.
  2. Chinese delivery times were the largest contributor to November's rise in global supply chain pressures, while US delivery times and Taiwanese purchases improved.
  3. Movements in the Global Supply Chain Pressure Index suggest developments in Asia are slowing the index's return to historical levels.

AI Summary. ChatGPT, the artificial intelligence chatbot built by OpenAI, appears effective at helping programmers spot and fix errors in their code and at answering the open-ended analytical questions common in school assignments. Many educators predict that such tools will spell the end of homework and take-home exams.

Kevin Roose New York Times
Date Posted:

ChatGPT by @OpenAI release to the public strikes @kevinroose as an important milestone, the first easily accessed AI tool. @nytimes

ChatGPT by @OpenAI release to the public strikes @kevinroose as an important milestone, the first easily accessed AI tool....

Can an AI chatbot debug code and complete school assignments?

Core argument: ChatGPT, built by the San Francisco A.I. company OpenAI, which is also responsible for GPT-3 and the image generator DALL-E 2, is the best artificial intelligence chatbot ever released to the general public.

ChatGPT is, quite simply, the best artificial intelligence chatbot ever released to the general public. It was built by OpenAI, the San Francisco A.I. company that is also responsible for tools like GPT-3 and DALL-E 2, the breakthrough image generator that came out this year. Users have also been finding more serious applications. For example, ChatGPT appears to be good at helping programmers spot and fix errors in their code. It also appears to be ominously good at answering the types of open-ended analytical questions that frequently appear on school assignments. (Many educators have predicted that ChatGPT, and tools like it, will spell the end of homework and take-home exams.)

Takeaways by Macro Roundup® AI

  1. ChatGPT, built by the San Francisco A.I. company OpenAI, which is also responsible for GPT-3 and the image generator DALL-E 2, is the best artificial intelligence chatbot ever released to the general public.
  2. ChatGPT appears to be good at helping programmers spot and fix errors in their code, one of the more serious applications users have found.
  3. ChatGPT appears to be good at answering the open-ended analytical questions that frequently appear on school assignments, and many educators have predicted that it and similar tools will spell the end of homework and take-home exams.

AI Summary. The authors estimate the cyclical shortfall in payroll jobs relative to just before the pandemic was about 810,000, far below a widely cited 5.8m estimate that assumes pre-pandemic tailwinds from falling unemployment and rising labor force participation would have continued. They expect a substantial deceleration in payroll growth even absent monetary and fiscal tightening.

Bart Hobijn and Ayşegül Şahin National Bureau of Economic Research
Date Posted:

As of October 2022, the US is 5.8mm jobs short of its pre-pandemic trend. @BHobijn and Aysegul Sahin argue that this number is attributable to cyclical factors that were unlikely to continue; they argue a proper accounting yields an 810k jobs shortfall. @NBER

How many jobs are actually missing since the pandemic?

Core argument: The authors' payroll jobs accounting yields a cyclical shortfall of 810,000 payroll jobs in October 2022 relative to just before the pandemic, well below the 5.8 million estimate of missing jobs.

The [5.8M estimate] of missing jobs is inflated because it is based on the unrealistic assumption that the pre-pandemic tailwinds for job growth from the decline in the unemployment rate and cyclical upward pressures on participation would have continued in 2020 and beyond if the pandemic would not have occurred. Instead, our payroll jobs accounting yields an 810 thousand cyclical shortfall in payroll jobs in October 2022 compared to right before the pandemic. At the recent pace of job growth, even without monetary and fiscal tightening, we expect a substantial deceleration of payroll growth in the coming months.

Takeaways by Macro Roundup® AI

  1. The authors' payroll jobs accounting yields a cyclical shortfall of 810,000 payroll jobs in October 2022 relative to just before the pandemic, well below the 5.8 million estimate of missing jobs.
  2. The 5.8 million missing-jobs estimate is inflated because it assumes pre-pandemic tailwinds from a falling unemployment rate and cyclical upward pressure on participation would have continued in 2020 and beyond absent the pandemic.
  3. The authors expect a substantial deceleration of payroll growth from its recent pace in the coming months, even without monetary and fiscal tightening.