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


Friday, May 26, 2023

AI Summary. Core personal consumption inflation, which excludes food and energy, rose at a 4.7% annual rate in April and a 4.3% annual rate over three months, moving sideways. Noisy items and imputed prices drove much of the high reading, but nothing suggests inflation will fall to 3.5% or below without further labor-market easing.

Jason Furman @jasonfurman
Date Posted:

According to @jasonfurman there is “nothing” in the PCE numbers that suggest inflation is on track to fall < 3.5% without further deterioration in the labor market.

Will inflation fall further without additional labor-market easing?

Core argument: Core PCE inflation rose at a 4.7% annual rate in April and a 4.3% annual rate over the past three months, which Jason Furman describes as a sideways move.

Another high reading for core PCE inflation, up 4.7% at an annual rate in April--and a 4.3% annual rate over the last three months, continuing its sideways move. But, under the hood it looks a little better as noisy items and imputations drove a lot of the extra high reading. Overall where does this leave us? The 4.7% annual rate for core PCE in April is too pessimistic a read of the inflation situation. But there is nothing in this report that would give any comfort that inflation is on track to fall to 3.5% or below without a further easing of the labor market.

Takeaways by Macro Roundup® AI

  1. Core PCE inflation rose at a 4.7% annual rate in April and a 4.3% annual rate over the past three months, which Jason Furman describes as a sideways move.
  2. Furman argues the 4.7% April reading is too pessimistic a read of the inflation situation, as noisy items and imputations drove much of the extra-high figure.
  3. Furman finds nothing in the PCE report offering comfort that inflation is on track to fall to 3.5% or below without further easing of the labor market.

AI Summary. A one standard deviation rise in the Kansas City Federal Reserve's Financial Stress Index historically precedes a 0.7 percentage point increase in unemployment and a roughly 0.4 percentage point fall in consumer price inflation over the first year — about half the 0.65 point disinflation estimated to follow comparable monetary tightening.

Brent Bundick, Johannes Matschke and A. Lee Smith Federal Reserve Bank of Kansas City
Date Posted:

An analysis from the @KansasCityFed examined the impact of monetary tightening and financial stress from banking instability, and found that financial stress is only about “half as disinflationary as monetary tightening.”

How much does financial stress reduce inflation compared with monetary tightening?

Core argument: A one standard deviation increase in the Kansas City Fed's Financial Stress Index historically portends a 0.7 percentage point rise in the unemployment rate and a roughly 0.4 percentage point decline in CPI inflation in the first year.

A spike in the Kansas City Fed’s Financial Stress Index historically leads to higher unemployment and somewhat lower inflation. A one standard deviation increase in financial stress typically portends an increase in the unemployment rate of 0.7 percentage points.  Financial stress historically reduces inflation as well: inflation, as measured by the consumer price index (CPI), falls by about 0.4 percentage points in the first year following an increase in financial stress.  By this metric, financial stress is about half as disinflationary as monetary tightening. Could the recent increase in financial stress generate the same disinflationary effects as tighter monetary policy? The left panel in Chart 2 shows that monetary policy tightening, as measured by an unexpected increase in the expected path of the federal funds rate (blue line), slows economic activity and raises the unemployment rate, similar to an increase in financial stress. However, despite a similar increase in the unemployment rate, inflation falls by 0.65 percentage points in the first year following monetary tightening (right panel), a considerably larger decline than we estimate following an increase in financial stress.

Takeaways by Macro Roundup® AI

  1. A one standard deviation increase in the Kansas City Fed's Financial Stress Index historically portends a 0.7 percentage point rise in the unemployment rate and a roughly 0.4 percentage point decline in CPI inflation in the first year.
  2. Monetary policy tightening historically lowers inflation by 0.65 percentage points in the first year, a considerably larger decline than the roughly 0.4 percentage points estimated after a rise in financial stress, making financial stress about half as disinflationary.
  3. An unexpected increase in the expected path of the federal funds rate slows economic activity and raises unemployment similarly to a rise in financial stress, yet produces a larger fall in inflation.

AI Summary. Work requirements are an imperfect substitute for the work incentive that social programs remove, and Europe applies such incentives more strictly than the US. An alternative would limit assistance by time rather than by income, as unemployment insurance does, allowing recipients to keep each extra dollar earned.

John Cochrane The Grumpy Economist
Date Posted:

.@JohnHCochrane argues in favor of work requirements and writes that the debate would be more productive if “we talked about the constraint posed by incentives, rather than the usual moral mudslinging.”

Should aid be limited by time rather than by income?

Core argument: Work requirements are an imperfect substitute for the work incentive that social programs eliminate, paralleling other U.S. policies that transfer income while containing disincentives, such as subsidizing gas and then regulating against its use.

Work requirements are an imperfect method to try to replace the incentive to work that social programs eliminate. Our government does this sort of thing all over to transfer income but contain the disincentives: Subsidize gas, and then regulate against its use for example. By the way, supposedly socialist Europe, after its experience with "the dole" in the early 1990s, is much more heard-hearted about these sorts of incentives than we are. Is there a better way? I've long played with the idea of limiting help by time rather than by income. That's how unemployment insurance works. We understand that replacing people's paycheck forever if they lose their job has bad incentive effects. Unemployment is understood as a temporary misfortune, and understanding the incentives, you get unemployment checks for a limited amount of time. Could not many other programs aimed at misfortune also be limited by time -- but then allow you to keep each extra dollar of earnings? Perhaps even unemployment should be a fixed amount of time, and you can keep receiving it for the full (normally) 26 weeks even if you get a job.

Takeaways by Macro Roundup® AI

  1. Work requirements are an imperfect substitute for the work incentive that social programs eliminate, paralleling other U.S. policies that transfer income while containing disincentives, such as subsidizing gas and then regulating against its use.
  2. One alternative is limiting assistance by time rather than by income, as unemployment insurance does with its normally 26 weeks, letting recipients keep each extra dollar of earnings.
  3. Europe, after its experience with "the dole" in the early 1990s, is more hard-hearted about these incentives than the United States.

Related Articles:

  • The Real Stakes of the Debt-Ceiling Fight — Average inflation-adjusted transfer payments to the lowest-income 20% of US households have grown from $9,677 to $45,389, while the share of prime working-age adults in that group who worked fell from 68% to 36%. Congressional Budget Office estimates put discretionary spending 10% higher in real terms than pre-pandemic projections, with nondefense outlays up 18.8% and defense down 0.28%.

AI Summary. Americans born around 1990 had higher death rates in their 20s than peers in affluent allied countries, and the gap widened across young adulthood. By age 29, US mortality for that cohort was about 2x New Zealand's, 2.5x France's, 3x Japan's, and 4x Italy's or Spain's.

Nicholas Eberstadt American Enterprise Institute
Date Posted:

Nicholas Eberstadt @AEI notes that the age-adjusted mortality rates for Americans born in 1990, the year after the Berlin Wall fell, is now higher than for those born in 1960, and 4X higher than Italy and Spain.

Do young American adults die at higher rates than allied peers?

Core argument: By age 29 in 2019, before the pandemic, mortality for America's Class of 1990 was nearly twice New Zealand's, two and a half times France's, three times Japan's, and four times that of Italy or Spain.

Compare mortality in young adulthood for America’s Class of 1990 with their counterparts from affluent Cold War allies. Since breakdown by sex does not add much information here, we display overall mortality rates at ages 20 through 31 for the US and select Western European allies in Figure 3. Death rates at age 20 were universally lower for the treaty allies than Americans in the Class of 1990—usually much lower. Further, mortality curves for these allies generally remained much “flatter” over the course of their 20s than for the US. Consequently, the divergence in mortality risks between the US and the allies tended to increase over young adulthood for the Class of 1990, even before COVID. By age 29—i.e., in 2019, before the pandemic—mortality rates for the Class of 1990 were almost twice as high in the US as in New Zealand; two and a half times higher than in France; three time higher than in Japan; four times higher than in Italy or Spain.

Takeaways by Macro Roundup® AI

  1. By age 29 in 2019, before the pandemic, mortality for America's Class of 1990 was nearly twice New Zealand's, two and a half times France's, three times Japan's, and four times that of Italy or Spain.
  2. Death rates at age 20 were lower for the affluent Cold War treaty allies than for Americans in the Class of 1990, usually much lower.
  3. Mortality curves for the allied countries generally remained much flatter across the 20s than the US curve, so the US–ally gap in mortality risk tended to widen over young adulthood for the Class of 1990.

Related Articles:

  • Who Won the Cold War? Part I — The Federal Reserve puts American households' net worth at nearly $140tn, an average of over $400,000 per person and over $1m per household of 2.5 people. Estimates of median wealth per adult in current US dollars across 170 countries and places allow this record to be compared with America's Cold War treaty allies in Europe and Asia.

AI Summary. Sociologists find that US women born in the late 1980s had, on average, about one child fewer by their early 30s than they had intended, roughly double the shortfall for women born two decades earlier. The median age at which women give birth is 30, three years older than in 1990.

Janet Adamy Wall Street Journal
Date Posted:
Is Database:
Database

In 2021 the US birth rate was 1.66/woman vs the “replacement rate” of 2.1. If the US rate had continued at its at 2007 peak, there would be 9.6mm more children in the US.

Are Americans having fewer children than they intend?

Core argument: Sociologists Karen Benjamin Guzzo and Sarah Hayford found that women born in the late 1980s had, by their early 30s, given birth to about one child fewer than they had planned, roughly double the shortfall for women born two decades earlier.

Sociologists Karen Benjamin Guzzo and Sarah Hayford found that when millennials (born 1981 to 1996) and the oldest members of Generation Z (starting in 1997) were surveyed in their late teens and early 20s, they said, on average, that they wanted to have at least two children. But the gap between women’s intended number of children and their actual family size has widened considerably. The researchers found that by the time women born in the late 1980s were in their early 30s, they had given birth, on average, to about one child less than they planned. That is roughly double the size of the shortfall for women born two decades earlier, and it is likely too large to be erased by a spurt of childbearing in their late 30s. The median age at which women give birth is 30, three years older than it was in 1990. Despite advances in fertility treatments, women who delay having kids until their final childbearing years reduce their chances of doing so—not just because it narrows their biological window but because other priorities and roadblocks can more easily derail their plans.

Takeaways by Macro Roundup® AI

  1. Sociologists Karen Benjamin Guzzo and Sarah Hayford found that women born in the late 1980s had, by their early 30s, given birth to about one child fewer than they had planned, roughly double the shortfall for women born two decades earlier.
  2. Millennials born 1981 to 1996 and the oldest members of Generation Z, born starting in 1997, said in surveys during their late teens and early 20s that they wanted at least two children on average.
  3. The median age at which women give birth is 30, three years older than in 1990, and women who delay childbearing to their final childbearing years reduce their chances of having children, through both a narrower biological window and competing priorities and roadblocks.

Tuesday, May 30, 2023

AI Summary. An analysis by two economists argues that future inflation will be driven by more persistent factors, chiefly a labor market they describe as still overheated and in need of cooling. They suggest disinflation without a significant rise in unemployment may be possible, noting that job vacancies have fallen without unemployment rising.

Paul Krugman Krugman Wonks Out
Date Posted:

.@paulkrugman takeaway from @benbernanke and @ojblanchard1 new research is that “immaculate disinflation” is still a real possibility.

Can inflation fall without a significant rise in unemployment?

Core argument: Olivier Blanchard and Ben Bernanke point to the labor market, which they say remains overheated and needs to cool, as the key to future inflation, even granting that government spending contributed to inflation's initial rise.

Even if you believe that excessive government spending played a big role in the initial rise in inflation, future inflation will reflect more persistent factors — which, in Olivier Blanchard and Ben Bernanke analysis, means focusing on the labor market, which they say is still overheated and needs to cool. The six-million-job question is whether this cooling off needs to involve a large rise in unemployment. The paper is actually fairly optimistic on that question, suggesting that “immaculate disinflation,” inflation coming down without any significant rise in unemployment, may be possible, and that even if it isn’t, those grim projections we were hearing a year ago about the need for many years of high unemployment no longer seem plausible. The ratio of vacancies to the unemployed as their measure of labor market tightness. And what has been really striking since late 2022 is that vacancies have come way down without any rise in unemployment.

Takeaways by Macro Roundup® AI

  1. Olivier Blanchard and Ben Bernanke point to the labor market, which they say remains overheated and needs to cool, as the key to future inflation, even granting that government spending contributed to inflation's initial rise.
  2. The Blanchard-Bernanke paper suggests "immaculate disinflation" — inflation falling without a significant rise in unemployment — may be possible, and that earlier projections of many years of high unemployment no longer seem plausible.
  3. Using the ratio of job vacancies to unemployed workers as their measure of labor market tightness, Blanchard and Bernanke observe that vacancies have come down substantially since late 2022 without any rise in unemployment.

Related Articles:

  • What Caused the U.S. Pandemic-Era Inflation? — The authors estimate that food and especially energy price shocks, along with increased demand for durable goods combined with supply-chain shortages, accounted for much of U.S. pandemic-era inflation, while the contribution of tight labor markets was small or negative early on. They estimate that tight labor-market conditions became an increasingly important, though not dominant, source of inflation over time.
  • Inflation: A Series of Unfortunate Events vs. Original Sin — Food and energy shocks do not explain core inflation, which the author attributes predominantly to excess demand rather than unpredictable shocks, with only the excess of headline over core inflation due to accident. Shortages are consistent with demand increases supporting higher overall consumption, and a soft landing to 2% inflation is unlikely.

AI Summary. The college enrollment rate for recent U.S. high-school graduates ages 16–24 fell to 62% from 66.2% before the pandemic, after peaking at 70.1%, according to Labor Department data. Teen unemployment reached a 70-year low of 9.2%, and hourly earnings for rank-and-file leisure and hospitality workers rose nearly 30% over four years versus roughly 20% for all workers.

Harriet Torry Wall Street Journal
Date Posted:

Rising costs of college plus a hot job market have driven down the college enrollment rate for American high school graduates aged 16-24 to 62% in 2022, down from 66% pre-pandemic. Male enrollment dropped to 57% from 67%.

Are strong job prospects pulling high-school graduates away from college?

Core argument: The college enrollment rate for recent U.S. high-school graduates ages 16 to 24 fell to 62% last year from 66.2% in 2019, after peaking at 70.1% in 2009, according to Labor Department data.

The college enrollment rate for recent U.S. high-school graduates, ages 16 to 24, declined to 62% last year from 66.2% in 2019, just before the pandemic began, according to the latest Labor Department data. The rate topped out at 70.1% in 2009. The unemployment rate for teenage workers ages 16 to 19 fell to a 70-year low of 9.2% last month, fueling larger pay increases. Average hourly earnings for rank-and-file leisure and hospitality workers were up nearly 30%, seasonally adjusted, from April 2019 to April 2023, compared with roughly 20% during the same period for all workers. College enrollment has declined by about 15% in the past decade, according to federal data. The reasons include the high cost of university education, colleges closing and uneven returns from getting a degree, as well as the hot job market.

Takeaways by Macro Roundup® AI

  1. The college enrollment rate for recent U.S. high-school graduates ages 16 to 24 fell to 62% last year from 66.2% in 2019, after peaking at 70.1% in 2009, according to Labor Department data.
  2. The unemployment rate for teenage workers ages 16 to 19 fell to a 70-year low of 9.2% last month, fueling larger pay increases.
  3. Average hourly earnings for rank-and-file leisure and hospitality workers rose nearly 30%, seasonally adjusted, from April 2019 to April 2023, compared with roughly 20% for all workers, while college enrollment declined about 15% over the past decade.

AI Summary. In the US, death rates at age 39 for the cohort born in 1980 exceeded those of cohorts born in 1970 and 1960, and death rates at age 29 for the 1990 cohort were indistinguishable from the 1950 cohort's. In Japan, mortality at 29 fell over 80% across comparable cohorts versus under 8% in the US.

Nicholas Eberstadt American Enterprise Institute
Date Posted:
Is Database:
Database

Nicholas Eberstadt @AEI notes that, even prior to the Covid pandemic, the mortality rates of American adults born after 1980 exceeded previous cohorts.

Have younger American cohorts stopped seeing mortality improvements?

Core argument: By 2019, before COVID, the US Class of 1980's death rates at age 39 exceeded those of the Classes of 1970 and 1960, and the Class of 1990's death rates at age 29 were indistinguishable from the Class of 1950's.

The awful truth remains: By 2019—that is, even before COVID—the Class of 1980’s death rates at age 39 were higher than their counterparts’ from the Classes of 1970 and 1960. At age 29, the Class of 1990’s death rates were indistinguishable from those of the Class of 1950. In Japan, the Class of 1990’s mortality rate at age 29 was over 80 percent lower than those of their “grandparents” from the Class of 1930. In the US, the corresponding differential was less than 8 percent. If we look carefully at Figure 2, we can see unwelcome “crossovers”—where death rates in adulthood exceeded those of earlier cohorts—for every US cohort from the Class of 1950 onward in the years after the Berlin Wall fell (1990 onward). This is what prolonged stagnation—at times, even reversal—in national health progress looks like.

Takeaways by Macro Roundup® AI

  1. By 2019, before COVID, the US Class of 1980's death rates at age 39 exceeded those of the Classes of 1970 and 1960, and the Class of 1990's death rates at age 29 were indistinguishable from the Class of 1950's.
  2. Japan's Class of 1990 had a mortality rate at age 29 more than 80 percent below that of the Class of 1930, while the corresponding US differential was under 8 percent.
  3. Every US cohort from the Class of 1950 onward shows "crossovers" in which adult death rates exceeded those of earlier cohorts in the years after 1990, a pattern described as prolonged stagnation, at times reversal, in national health progress.

Related Articles:

  • Who Won the Cold War? Part I — The Federal Reserve puts American households' net worth at nearly $140tn, an average of over $400,000 per person and over $1m per household of 2.5 people. Estimates of median wealth per adult in current US dollars across 170 countries and places allow this record to be compared with America's Cold War treaty allies in Europe and Asia.
  • Who Won the Cold War? Part II — Americans born around 1990 had higher death rates in their 20s than peers in affluent allied countries, and the gap widened across young adulthood. By age 29, US mortality for that cohort was about 2x New Zealand's, 2.5x France's, 3x Japan's, and 4x Italy's or Spain's.

AI Summary. The pandemic-era buildup in household savings has been spent for most families, with the share of households reporting savings equal to three months of expenses down to just above pre-pandemic levels. Higher-income households are less likely to hold a sufficient emergency fund than before the pandemic.

Joseph Politano Apricitas Economics
Date Posted:

.@JosephPolitano estimates that Americans have only $750B of excess savings – or $650B adjusted for inflation. At the current pace of spending the excess savings will be exhausted by the end of 2023.

Have households spent the savings built up during the pandemic?

Core argument: The share of U.S. households reporting savings worth 3 months of expenses has dipped to just above pre-pandemic levels, and from most families' perspectives the excess savings accumulated during the pandemic are now entirely gone.

From most families’ perspectives, the excess savings accumulated during the pandemic are now entirely gone. The share of households saying they had savings worth 3 months of expenses dipped to just above pre-pandemic levels, with higher-income households being noticeably less likely to have a sufficient emergency fund than they were in 2019.

Takeaways by Macro Roundup® AI

  1. The share of U.S. households reporting savings worth 3 months of expenses has dipped to just above pre-pandemic levels, and from most families' perspectives the excess savings accumulated during the pandemic are now entirely gone.
  2. Higher-income U.S. households are noticeably less likely to hold a sufficient emergency fund than they were in 2019.

AI Summary. Migration to rich countries has reached record levels, with roughly 1.2m people moving to Britain in a year, net migration to Canada more than double its previous record, and net migration to Germany exceeding its 2015 peak. The foreign-born population of the rich world is rising faster than at any point in history.

Economist Staff The Economist
Date Posted:

Advanced economies are facing a wave of immigration, with the foreign-born population of major advanced economies running at the fastest pace in several decades. @TheEconomist

Is migration to rich countries reaching record levels?

Core argument: Britain received 1.2m immigrants last year, almost certainly the most ever, while nearly 1.4m people on net are expected to move to America this year, one-third more than before the pandemic.

Last year 1.2m people moved to Britain—almost certainly the most ever. Net migration (i.e., immigrants minus emigrants) to Australia is currently twice the rate before the covid-19 pandemic. Spain’s equivalent figure recently hit an all-time high. Nearly 1.4m people on net are expected to move to America this year, one-third more than before the pandemic. In 2022 net migration to Canada was more than double the previous record. In Germany it was even higher than during the “migration crisis” of 2015. The rich world as a whole is in the middle of an unprecedented migration boom. Its foreign-born population is rising faster than at any point in history.

Takeaways by Macro Roundup® AI

  1. Britain received 1.2m immigrants last year, almost certainly the most ever, while nearly 1.4m people on net are expected to move to America this year, one-third more than before the pandemic.
  2. Net migration to Canada in 2022 was more than double the previous record, Germany's exceeded levels seen during the 2015 "migration crisis," and Spain's recently hit an all-time high.
  3. The rich world's foreign-born population is rising faster than at any point in history, with net migration to Australia currently running at twice its pre-covid rate.

AI Summary. Data from the Cooperative Election Study show millennials and Gen Z have voted increasingly for Democratic House candidates over time, contrary to the adage that voters grow more conservative as they age. One political scientist notes such generational shifts translate slowly into vote share and can be offset by Republican gains elsewhere.

Thomas Edsall New York Times
Date Posted:

.@Edsall provides evidence that younger Americans have shifted to the political left; but given older voters’ higher turnout rates, he argues it may take over 20 years for the Democrats to net 3pp on their vote share.

Do younger voters become more conservative as they age?

Core argument: Cooperative Election Study data show millennials (born 1981–1996) and Gen Z (born 1997 and after) have become more Democratic over time, defying the adage that voters grow more conservative as they age.

Defying the adage among practitioners and scholars of politics that voters become more conservative as they age — millennials (those born between 1981 and 1996) and Gen Z (those born in 1997 and afterward) have in fact become decidedly more Democratic over time, according to data compiled by the Cooperative Election Study. The graphic below, which is derived from the study, shows a significant increase in voting for House Democratic candidates among millennials and Gen Z. Brian Schaffner, a political scientist at Tufts observed "Because the population is very big and turnout rates tend to be much higher for older adults, these trends can be slow to lead to significant gains. For example, in 2018, I applied a life expectancy model to our C.E.S. data and using that model I calculated that it would take more than 20 years for Democrats to gain just 3 percentage points on their vote share from differential mortality. Those gains could easily be offset by Republicans doing a bit better among other groups. For example, part of what has helped them in recent elections is that even while the share of the population who are non-college white people is in decline, it is still a large group that (1) has come to vote more Republican in the past decade and (2) has seen its turnout rate increase during the same period."

Takeaways by Macro Roundup® AI

  1. Cooperative Election Study data show millennials (born 1981–1996) and Gen Z (born 1997 and after) have become more Democratic over time, defying the adage that voters grow more conservative as they age.
  2. Tufts political scientist Brian Schaffner, applying a life expectancy model to 2018 Cooperative Election Study data, calculated that Democrats would take more than 20 years to gain 3 percentage points of vote share from differential mortality.
  3. Schaffner notes that Democratic gains could be offset by Republican strength among non-college white voters, a declining but still large group that has voted more Republican and seen its turnout rise over the past decade.

Related Articles:

  • Millennials are Shattering the Oldest Rule in Politics — British "silent generation" and baby boomers grew more conservative with age, and Gen X is following the same path, but millennials, born 1981-1996, diverged from that trajectory. The most likely explanation is a cohort effect, with US survey data showing millennials favoring greater redistribution from rich to poor than earlier generations.
  • What Happened In 2022 — Young voters aged 18–29 backed Democrats by 65%, and in heavily contested states turnout among those eligible in two consecutive elections rose 6%. Women voters, for whom abortion rights were often the top issue, favored Democrats in close races, while "MAGA" Republicans underperformed in contested Senate, gubernatorial, and congressional contests.

AI Summary. German start-up Proxima Fusion has raised €7mn to develop a stellarator, an alternative to the better-known tokamak device, for generating electricity by fusing atoms. A stellarator's twisted structure is harder to design and build but produces a more stable plasma that could let scientists sustain the fusion reaction longer.

Tom Wilson Financial Times
Date Posted:

The first startup to ever spin off of German’s Max Planck Institute is using an alternative approach to fusion power that offers potentially more stable plasma than tokamak devices.

The first startup to ever spin off of German’s Max Planck Institute is using an alternative approach to fusion power...

Can a twisted fusion device sustain reactions longer than conventional designs?

Core argument: Proxima Fusion, incorporated in January, raised €7mn in initial funding to develop a stellarator fusion machine, which it hopes can provide a future source of abundant, emissions-free power.

A German start-up has secured initial funding to develop a revolutionary fusion energy machine that it hopes can provide a future source of abundant, emissions-free power. Proxima Fusion, incorporated in January, aims to build a complex device known as a stellarator and is the latest company to join the emerging fusion industry’s effort to generate electricity by fusing atoms. Although the amount of funding is small at only €7mn, it is significant as Proxima is the first fusion company to spin out of Germany’s revered Max Planck Institute for Plasma Physics. Little known outside the world of plasma physics, a stellarator is an alternative to the better-known tokamak device. The twisted structure of the stellarator is more complicated to design and build than a traditional tokamak but produces a more stable plasma that could enable scientists to sustain the fusion reaction for longer.

Takeaways by Macro Roundup® AI

  1. Proxima Fusion, incorporated in January, raised €7mn in initial funding to develop a stellarator fusion machine, which it hopes can provide a future source of abundant, emissions-free power.
  2. Proxima Fusion is the first fusion company to spin out of Germany's Max Planck Institute for Plasma Physics.
  3. A stellarator's twisted structure is more complicated to design and build than the better-known tokamak but produces a more stable plasma that could enable scientists to sustain the fusion reaction for longer.

AI Summary. Pharmaceutical firms favor incremental drugs because they are easier to evaluate, even though novel drugs generate more learning that improves future screening decisions. The authors argue policymakers could strengthen incentives for novel research by making it easier for firms to capture indirect revenues from successor projects, which accrue even when the original project fails.

Alexander Frankel, Joshua Krieger, Danielle Li and Dmitris Papanikolaou National Bureau of Economic Research
Date Posted:

.@JoshuaLKrieger @Danielle__Li @DimitrisPapan20 examine R+D investment in drug development and find that research into novel therapies often leads to profitable opportunities in successor therapies that are closely related.

Why do drug companies favor incremental research over novel research?

Core argument: Pharmaceutical firms prefer investing in incremental drugs, which are easier to evaluate, even though novel drugs generate more learning.

If past research informs current work, then firms face a choice. Is it more valuable to learn from exploring new areas, or to exploit the information revealed by past work? In this paper, we show that despite novel drugs generating more learning, firms prefer to invest in incremental drugs, which are easier to evaluate. This presents a dynamic tension: while firms value the ability to discard incremental drugs that are unlikely to succeed, they are reluctant to make the types of exploratory R&D investments that improve future screening decisions.  our results suggest that policymakers could provide stronger incentives for firms to develop novel drugs by making it easier for them to appropriate indirect revenues from potential successors. These revenues, which can exist even when the focal project fails, disproportionately increase the overall returns to investing in newer, more uncertain research areas.

Takeaways by Macro Roundup® AI

  1. Pharmaceutical firms prefer investing in incremental drugs, which are easier to evaluate, even though novel drugs generate more learning.
  2. A dynamic tension arises in which firms value the option to discard incremental drugs unlikely to succeed but remain reluctant to make exploratory R&D investments that improve future screening decisions.
  3. Policymakers could strengthen incentives for novel drug development by making it easier for firms to appropriate indirect revenues from potential successors, which can exist even when the focal project fails.