Edward Conard

Top Ten New York Times Bestselling Author

  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard 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 fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…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
  • “…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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, July 21, 2023

AI Summary. The authors find that the rise in reported pain among Americans was almost entirely concentrated in the 2007–2010 recession period rather than following a smooth upward trend, with the disproportionate increase among the less educated also occurring primarily then. The authors state they find this jump difficult to explain.

Sneha Lamba and Robert Moffitt National Bureau of Economic Research
Date Posted:

The increase in reported pain among Americans wasn’t a linear trend over decades but was almost entirely concentrated in the 2007-2010 period among the less educated. @ramoffitt4

Did the rise in American reported pain occur during one recession?

Core argument: The authors find the rise in American pain was almost entirely concentrated in the 2007–2010 period of the Great Recession rather than following a smooth upward trend, a result they say prior work did not uncover.

We show that, rather than resulting from a smooth upward trend, the increase was almost entirely concentrated in the 2007-2010 period, the time of the Great Recession, a result not uncovered in prior work. The disproportionate increase in pain among the less educated is also shown to have occurred primarily at the time of the Recession, with either little or no trend before or after. The Recession jump occurred only at older ages and primarily only at the points during each cohort’s lifetime when they experienced the Recession. However, we too find the jump difficult to explain, for while there is necessarily a temporary decline in employment during a Recession, why there should be a permanent increase in pain as a result is unclear.

Takeaways by Macro Roundup® AI

  1. The authors find the rise in American pain was almost entirely concentrated in the 2007–2010 period of the Great Recession rather than following a smooth upward trend, a result they say prior work did not uncover.
  2. The disproportionate increase in pain among the less educated occurred primarily at the time of the Great Recession, with little or no trend before or after, according to the authors.
  3. The Recession-era jump in pain appeared only at older ages and primarily at the points in each cohort's lifetime when they experienced the Recession, and the authors state they find the jump difficult to explain.

Related Articles:

  • Drug Overdose Deaths Topped 100,000 Again in 2022 — The Centers for Disease Control and Prevention counted a provisional 109,680 US overdose deaths in a year, essentially flat against 109,179 the prior year. The plateau follows a 16% increase in overdose deaths in one year and a 30% surge the year before.
  • America’s Work Ethic Is Under Assault — More than 11% of American men aged 25 to 64 — about 7m — are neither working nor looking for work, and barely half of native-born prime-age men without a high school degree are in the job market. The share not in the labor force has risen about one percentage point every seven years since 1965.

AI Summary. Taiwan Semiconductor Manufacturing Company said a shortage of skilled workers is hampering construction of its first Arizona chip factory, pushing mass production of 4-nanometer chips to 2025 from a previously stated 2024, and may require temporarily bringing in experienced technicians from Taiwan. The company expects to invest $40bn in Arizona.

Yang Jie Wall Street Journal
Date Posted:

TSMC’s new Arizona fab is pushing back the start of production by a year, citing a shortage of skilled workers.

Is a skilled worker shortage delaying advanced chip production in the US?

Core argument: TSMC pushed back mass production of 4-nanometer chips at its first Arizona factory from 2024 to 2025, with Chairman Mark Liu citing a shortage of skilled workers hampering construction.

TSMC Chairman Mark Liu said construction in Arizona is hampered by a shortage of skilled workers and that the company might have to bring in experienced technicians temporarily from Taiwan. He said this would delay the start of mass production of 4-nanometer chips in the first factory until 2025. Previously TSMC described the 4-nanometer chip as the leading product of the first Arizona factory and said production would start in 2024. Overall, it expects to invest $40 billion in Arizona. “We are now entering a critical phase of handling and installing the most advanced and dedicated equipment. However, we are encountering certain challenges,” Liu said.

Takeaways by Macro Roundup® AI

  1. TSMC pushed back mass production of 4-nanometer chips at its first Arizona factory from 2024 to 2025, with Chairman Mark Liu citing a shortage of skilled workers hampering construction.
  2. Mark Liu said TSMC might temporarily bring experienced technicians from Taiwan to Arizona, as the company enters what he called a critical phase of handling and installing the most advanced and dedicated equipment.
  3. TSMC expects to invest $40 billion in Arizona and had previously described the 4-nanometer chip as the leading product of its first factory there.

Related Articles:

  • TSMC To Send Hundreds More Workers To Speed U.S. Plant Construction — Chipmaker TSMC and its suppliers are in talks with the U.S. government on non-immigrant visas to dispatch more than 500 experienced workers to speed construction of its U.S. chip plants, according to chip supply chain executives. Executives said too few U.S. workers have hands-on experience building semiconductor facilities, causing installation delays.
  • The Semiconductor Trade War — A boom in US domestic chipmaking construction has raised demand for semiconductor manufacturing equipment that cannot be met domestically, pushing US equipment imports near an all-time high, with Japan, the European Union, and Singapore as the major sources. This helps explain why the market for semiconductor equipment has not contracted alongside the market for chips.

AI Summary. U.S. small firms account for 49% of employment but 16% of business R&D spending and 18.8% of patents issued, while firms with more than 25,000 workers account for 36% of R&D and the largest firms 37.4% of patents. A survey of nearly 1,000 scientists and engineers found most internationally filed patents came from firms with more than 500 employees.

Robert Atkinson Information Technology and Innovation Foundation
Date Posted:

According to @RobAtkinsonITIF, the public discourse around startups downplays the importance of large firms in driving American innovation.

According to @RobAtkinsonITIF, the public discourse around startups downplays the importance of large firms in driving...

Do large firms drive more U.S. innovation than small firms?

Core argument: Small U.S. firms account for 49% of employment but just 16% of business R&D spending, while firms with more than 25,000 workers account for 36% of that spending.

While small firms account for 49% of U.S. employment, they account for just 16% of business spending on R&D, while firms of more than 25,000 workers account for 36%. Likewise, small firms account for 18.8% of patents issued, while the largest firms account for 37.4% of patents. When ITIF surveyed almost 1,000 U.S. scientists and engineers involved in filing triadic patents (patents filed in the United States, Europe, and Japan), they found that approximately 75% of materials science and IT patents and 60% of life science patents were filed by firms with more than 500 employees. Countering the popular narrative that large firms are sluggish copiers and small firms the true innovators, firms with 500 or fewer workers in the sample accounted for only around 30% of patents, yet they employed 48.4% of workers.

Takeaways by Macro Roundup® AI

  1. Small U.S. firms account for 49% of employment but just 16% of business R&D spending, while firms with more than 25,000 workers account for 36% of that spending.
  2. Small firms account for 18.8% of U.S. patents issued, while the largest firms account for 37.4%.
  3. In an ITIF survey of nearly 1,000 U.S. scientists and engineers filing triadic patents, roughly 75% of materials science and IT patents and 60% of life science patents came from firms with more than 500 employees.

Related Articles:

AI Summary. A review of 494 peer-reviewed studies testing five happiness-boosting strategies against control groups found only 57 met basic standards for sample size or pre-registered hypotheses, and those remaining studies did not confirm that three of the five activities made people happier. The authors note that every field examining its own rigor and reproducibility has found similar problems.

Nidhi Subbaraman Wall Street Journal
Date Posted:

.@NidhiSubs cites research by @DunnHappyLab showing that most studies on happiness have lacked scientific rigor. Only 57 of 494 peer-reviewed papers evaluated met minimal standards for good research.

.@NidhiSubs cites research by @DunnHappyLab showing that most studies on happiness have lacked scientific rigor. Only 57 of...

Do studies on happiness-boosting strategies meet basic standards of rigor?

Core argument: Dunn and Folk collected 494 peer-reviewed papers testing one of five happiness strategies against a control group, and only 57 survived screening for design quality, leaving the vast majority too poorly designed to support their conclusions.

Dunn and Folk gathered 494 peer-reviewed papers, in which one of the five happiness strategies was evaluated against a control group. When they weeded out weakly designed work, only 57 studies were left. The vast majority of papers were too poorly designed to support their conclusions. The remaining subset of studies met at least one of two conditions for good science: They included sufficient numbers of study participants or the researchers committed to hypotheses or study plans before analyzing their data. These studies failed to confirm that three of the five activities made people happy. “The evidence melts away when you look at it,” Dunn said. A handful of scandals in psychology in the 2010s—including a bombshell paper that demonstrated the danger of p-hacking—sent shock waves through the field and forced researchers to re-examine the status quo. This reform isn’t limited to psychology. “Every field that has bothered to look at issues of rigor and reproducibility in their evidence has found challenges."

Takeaways by Macro Roundup® AI

  1. Dunn and Folk collected 494 peer-reviewed papers testing one of five happiness strategies against a control group, and only 57 survived screening for design quality, leaving the vast majority too poorly designed to support their conclusions.
  2. The 57 surviving studies, which either included sufficient participants or involved researchers committing to hypotheses or study plans before analyzing data, failed to confirm that three of the five happiness activities made people happier; Dunn said, "The evidence melts away when you look at it.".
  3. A handful of psychology scandals in the 2010s, including a paper demonstrating the danger of p-hacking, forced researchers to re-examine the status quo, and every field that has examined rigor and reproducibility in its evidence has found challenges.

AI Summary. A Peking University economist estimated in the financial magazine Caixin that China's youth jobless rate could have been as high as 46.5% if 16m non-students idle at home or dependent on parents were counted. The official rate, which counts only those actively seeking work, reached a record 21.3%.

Reuters Staff Nikkei Asia
Date Posted:

Peking University professor Zhang Dandan estimates that China’s youth unemployment rate could be as high as 46.5% if one includes 16mm young non-working non-students who are living with their parents.

Peking University professor Zhang Dandan estimates that China’s youth unemployment rate could be as high as 46.5% if...

Does China's official youth jobless rate understate actual unemployment?

Core argument: Zhang Dandan, associate professor of economics at the National School of Development, wrote in Caixin that China's youth jobless rate could have been as high as 46.5% if 16 million non-students "lying flat" at home or relying on parents were counted.

If 16 million non-students "lying flat" at home or relying on their parents were included, the rate at that time could have been as high as 46.5%, Zhang Dandan wrote in an online article in respected financial magazine Caixin. The article by Zhang, associate professor of Economics at the university's National School of Development, was published on Monday but has since been removed. The official youth jobless rate, which only includes people actively seeking work, rose further to a record 21.3% in June after the world's second-biggest economy lost steam in the second quarter.

Takeaways by Macro Roundup® AI

  1. Zhang Dandan, associate professor of economics at the National School of Development, wrote in Caixin that China's youth jobless rate could have been as high as 46.5% if 16 million non-students "lying flat" at home or relying on parents were counted.
  2. China's official youth jobless rate, which counts only those actively seeking work, rose to a record 21.3% in June after the world's second-biggest economy lost steam in the second quarter.
  3. Zhang Dandan's article in the financial magazine Caixin has since been removed.

Related Articles:

  • Why Has Youth Unemployment Risen So Much in China? — Young workers aged 15-24 are particularly vulnerable when economic growth slows, and China's youth unemployment rate does not appear to be an outlier relative to its income level among global peers. Mismatches between the skills graduates acquire in higher education and those employers demand may add to labor market frictions.
  • China’s Youth Left Behind As Jobs Crisis Mounts — China's unemployment rate for 16- to 24-year-olds reached 20.8%, the highest since the data series began in 2018 and above levels in European countries such as France and Italy. The national civil service examination drew a record 2.6mn applicants, nearly 2x the 2019 figure, with a 1.4% success rate.

Monday, July 24, 2023

AI Summary. The normally inverse relationship between unemployment and worker quit rates broke down during and after the pandemic, with quits far above what unemployment would have predicted, and has since moved back toward its historical norm. The author argues this fading of pandemic-era labor market distortions, rather than Federal Reserve tightening, best explains slowing wage growth and disinflation.

Paul Krugman Krugman Wonks Out
Date Posted:

.@paulkrugman argues deflation to this point has been driven by “recombobulation,” or the fading of pandemic-related shocks, not tighter monetary policy.

Does fading labor market disruption explain disinflation better than Fed tightening?

Core argument: The quit rate's inverse relationship with unemployment, a quits-based version of the Beveridge Curve, broke down during the pandemic as quits ran far above what the unemployment rate would have predicted, presumably reflecting labor market dislocation.

Normally there is a fairly close inverse relationship between unemployment and quits, a quit-rate version of the famous Beveridge Curve linking unemployment to vacancies. During the pandemic and its aftermath, however, quits were much higher than the normal relationship to the unemployment rate would have predicted, presumably reflecting the dislocation of labor markets in a time of wild and crazy changes. Here too we see recombobulation, with the relationship of quits to unemployment moving back toward the historical norm, which is probably the main reason wage growth appears to be slowing. Stories about recombobulation — the fading away of pandemic-era distortions — driving disinflation are clearly supported by the data. Claims that Fed tightening drove it are sketchier and much more speculative. Which is not to say that the Fed was wrong to raise rates.

Takeaways by Macro Roundup® AI

  1. The quit rate's inverse relationship with unemployment, a quits-based version of the Beveridge Curve, broke down during the pandemic as quits ran far above what the unemployment rate would have predicted, presumably reflecting labor market dislocation.
  2. The quits-unemployment relationship is moving back toward its historical norm, which is probably the main reason wage growth appears to be slowing.
  3. The data support explanations of disinflation that credit the fading of pandemic-era distortions, while claims that Fed tightening drove disinflation are sketchier and more speculative, though that does not mean the Fed was wrong to raise rates.

Related Articles:

  • When Should We Declare Victory Over Inflation? — 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%.
  • The Second Great Experiment Update — Newer macroeconomic theory using forward-looking rather than adaptive expectations holds that inflation is stable under an interest rate target and can fade on its own even when interest rates sit below the inflation rate. Under the fiscal theory of the price level, a burst of inflation devalues government debt and ends once the real value of that debt is restored.
  • Fiscal Arithmetic and the Global Inflation Outlook — Across advanced economies, core inflation is significantly positively associated with growth in government debt since the start of the pandemic, and the authors expect this decade's fiscal expansions to shift price levels permanently higher. They argue this differs from permanently higher inflation, projecting inflation to diminish as temporary deficits normalize, with medium-term inflation expectations still anchored near central bank targets.

AI Summary. Underlying core inflation has slowed but remains well above the Federal Reserve's 2% target, with durable goods inflation over three months near typical pre-pandemic lows while services inflation stays about 2 percentage points above pre-pandemic norms. Risks ahead include sharper durable goods deflation or services inflation becoming entrenched at current levels.

Chris Marsh Money: Inside and Out
Date Posted:

The June CPI print shows steady deflation after removing volatile items; however, the reading is still well above target. @GeneralTheorist

Is core inflation slowing enough to reach the Fed's target?

Core argument: Services inflation remains about 2 percentage points above pre-pandemic norms, while adjusted durables inflation over three months has moved close to typical pre-pandemic lows.

Adjusted durables remain volatile, of course, but over 3 months are now close to typical pre-pandemic lows. Services remain elevated, about 2ppts above pre-pandemic norms. Overall, the Fed can be encouraged by the disinflation of underlying core inflation—though the reading is still well above 2%.  There may be two risks ahead. The first would be if durables goods begin to show even sharper deflation, perhaps portending more general price pressures. The second is if service inflation becomes entrenched at current levels—lower than a year ago, but well above a rate consistent with the Fed’s target.

Takeaways by Macro Roundup® AI

  1. Services inflation remains about 2 percentage points above pre-pandemic norms, while adjusted durables inflation over three months has moved close to typical pre-pandemic lows.
  2. The Federal Reserve can be encouraged by the disinflation of underlying core inflation, though the reading remains well above 2%.
  3. Two risks ahead are sharper durable goods deflation, which could portend more general price pressures, and services inflation becoming entrenched well above a rate consistent with the Federal Reserve's target.

AI Summary. Unemployment rates in 25 US states are at or within 0.1 percentage point of a record low, according to Bureau of Labor Statistics data. Payroll employment remains below pre-pandemic levels in a dozen states and Washington, DC, including New York and Hawaii, while Idaho, Utah, Texas, and Florida posted among the largest employment gains.

Reade Pickert, and Alexandre Tanzi Bloomberg
Date Posted:

The unemployment rate is at or near a record low in half of American states.

Are unemployment rates at record lows in half of US states?

Core argument: Unemployment rates in 25 US states stand at or within 0.1 percentage point of record lows, according to Bureau of Labor Statistics data.

The unemployment rates in 25 states are currently at or within 0.1 percentage point of a record low [according to] Bureau of Labor Statistics data. In a dozen states and DC, the number of people on payrolls remains below pre-pandemic levels. That includes New York and Hawaii. Idaho, Utah, Texas, and Florida were among the states with the biggest gains in employment since February 2020.

Takeaways by Macro Roundup® AI

  1. Unemployment rates in 25 US states stand at or within 0.1 percentage point of record lows, according to Bureau of Labor Statistics data.
  2. Payroll employment in a dozen states plus Washington, DC, including New York and Hawaii, remains below pre-pandemic levels.
  3. Idaho, Utah, Texas, and Florida were among the states posting the largest employment gains since February 2020.

Related Articles:

  • Labor Inelasticity — Early retirements during the pandemic cut labor supply, and the resulting wage spike drew in workers who had not been seeking jobs, lifting prime-age labor force participation to multi-year highs near 1990s peaks. With little slack left, moderating employment growth would reflect labor scarcity accompanied by reaccelerating wages.
  • Unions’ Inflation Warning? — The share of people aged 16 and over working or looking for work fell when the pandemic hit and has only partly recovered, with population aging accounting for most of the remaining shortfall. That implies economic activity must run at a lower level to avoid persistent wage and price inflation.
  • America Is Barreling Toward a Summer of Strikes — More than 650,000 US workers are on strike or threatening to strike, a level of union activity not seen in decades, with actors and writers already out and unions at UPS and Detroit's three largest automakers poised to join if contract talks fail. One Bank of America analyst put the odds of a United Auto Workers strike above 90%.

AI Summary. US labor force participation among people aged 25–54 stands at 83.5%, a two-decade high, with rising participation among prime-age women offsetting a decline among prime-age men since 2000. Participation for prime-age women reached a record 77.8%, up from 73.5% at the pandemic's low.

Jeffrey Sparshott Wall Street Journal
Date Posted:
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Americans aged 25-54 are employed or looking for jobs at rates not seen in two decades, helping counter the exodus of older baby boomers from the workforce.

Is rising participation among prime-age women lifting overall labor force participation?

Core argument: U.S. prime-age (25–54) labor force participation stands at a two-decade high of 83.5%, as rising female participation has offset a decline in prime-age male participation since 2000.

American prime age 25-54 labor force participation is at a two decade high of 83.5% as an uptick in prime age female LFP has offset a decline in male prime age LFP since 2000. In the first months of the pandemic, nearly four million prime-age workers left the labor market, pushing participation in early 2020 to the lowest level since 1983—before women had become as much of a force in the workplace. Prime-age workers now exceed prepandemic levels by almost 2.2 million. The resurgence of midcareer workers is driven by women taking jobs. The labor-force participation rate for prime-age women was the highest on record, 77.8% in June. That is well up from 73.5% in April 2020.

Takeaways by Macro Roundup® AI

  1. U.S. prime-age (25–54) labor force participation stands at a two-decade high of 83.5%, as rising female participation has offset a decline in prime-age male participation since 2000.
  2. Prime-age women's labor force participation reached a record 77.8% in June, up from 73.5% in April 2020, driving the resurgence of midcareer workers.
  3. Nearly four million prime-age workers left the labor market in the first months of the pandemic, pushing participation in early 2020 to its lowest since 1983, but prime-age workers now exceed prepandemic levels by almost 2.2 million.

Related Articles:

  • The Labor Supply Rebound from the Pandemic — The prime-age labor force participation rate, which took more than a decade to recover after the Great Recession, has returned to those high levels, indicating that the "missing workers" discussed during the pandemic recovery are largely back in the labor market.
  • Where Are the Missing Gen Z Workers — US labor-force participation for ages 25 to 54 reached 83.1%, surpassing its pre-pandemic peak, while participation rates for those ages 20 to 24 and over 55 remain well below pre-pandemic levels. More than 400,000 Americans in their 20s are missing from the labor force, a decline not explained by shifts in age composition.

AI Summary. Children from top-1% families are more than 2x as likely as middle-class students with comparable SAT/ACT scores to attend an Ivy-Plus college, with two-thirds of the gap attributable to higher admissions rates. The authors attribute this advantage to legacy preferences, weight on non-academic credentials, and athlete recruitment.

Raj Chetty, David Deming and John Friedman National Bureau of Economic Research
Date Posted:
Is Database:
Database
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.@OppInsights finds that the “Ivy-Plus” (Ivy League, plus UChicago, Duke, MIT, Stanford) admit students from the highest income families scoring in the top 1% of SAT/ACT at far greater rates than those from lower-income families.

Why are high-income students likelier to attend highly selective private colleges?

Core argument: Children from top-1% families are more than twice as likely to attend an Ivy-Plus college (Ivy League, Stanford, MIT, Duke, Chicago) as middle-class students with comparable SAT/ACT scores.

Children from families in the top 1% are more than twice as likely to attend an Ivy-Plus college (Ivy League, Stanford, MIT, Duke, and Chicago) as those from middle-class families with comparable SAT/ACT scores. Two-thirds of this gap is due to higher admissions rates for students with comparable test scores from high-income families; the remaining third is due to differences in rates of application and matriculation. The high-income admissions advantage at private colleges is driven by three factors: (1) preferences for children of alumni, (2) weight placed on non-academic credentials, which tend to be stronger for students applying from private high schools that have affluent student bodies, and (3) recruitment of athletes, who tend to come from higher-income families. Highly selective public colleges that follow more standardized processes to evaluate applications exhibit smaller disparities in admissions rates by parental income than private colleges that use more holistic evaluations.

Takeaways by Macro Roundup® AI

  1. Children from top-1% families are more than twice as likely to attend an Ivy-Plus college (Ivy League, Stanford, MIT, Duke, Chicago) as middle-class students with comparable SAT/ACT scores.
  2. Two-thirds of that attendance gap comes from higher admissions rates for high-income students with comparable test scores, and the remaining third from differences in application and matriculation rates.
  3. The high-income admissions advantage at private colleges reflects preferences for alumni children, weight on non-academic credentials that tend to be stronger among applicants from affluent private high schools, and recruitment of athletes, while highly selective public colleges using more standardized evaluation show smaller disparities by parental income.

Related Articles:

  • Why Do Wages Grow Faster for Educated Workers? — College graduates sort into professional, non-routine occupations where wages rise much more with job tenure, and the author estimates this occupational sorting explains at least half of the life-cycle growth in the college wage premium. That premium is estimated at 22% at age 26, 49% at age 40, and 56% at age 60.
  • Multidimensional Human Capital and the Wage Structure — The wage return to cognitive skills has declined, from about 10% higher hourly wages per standard deviation of test score in the 1980s and early 1990s to 4.5% in the 2000s and early 2010s, while returns to a bachelor's degree rose. Social skill-intensive occupations grew as a share of US jobs, with faster real wage growth.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. Chinese direct overseas investment fell 18% year over year by one new measure, and is down 25% from its 2016 peak amid plummeting overseas mergers and acquisitions and tighter Chinese rules to curb capital flight. Nickel-rich Indonesia is the largest recipient of Chinese investment, according to preliminary American Enterprise Institute estimates.

Stella Yifan Xie and Jason Douglas Wall Street Journal
Date Posted:

Chinese investment in the US has declined by just under 25% as focus shifts to manufacturing and natural resource investments in non-Western nations. @AEIecon @DerekScissors1

Is Chinese overseas investment declining and shifting away from the West?

Core argument: China's direct overseas investment to the rest of the world fell 18% from a year earlier by one new measure, leaving it 25% below its 2016 peak.

The biggest recipient of Chinese investment so far this year is nickel-rich Indonesia, according to a preliminary estimate of Chinese investments compiled by the American Enterprise Institute. Direct overseas investment from China to the rest of the world fell by 18% from a year earlier by one new measure released recently. The latest level marks a decline of 25% from a peak in 2016, as overseas mergers and acquisitions have plummeted and Beijing has tightened rules to curb capital flight.

Takeaways by Macro Roundup® AI

  1. China's direct overseas investment to the rest of the world fell 18% from a year earlier by one new measure, leaving it 25% below its 2016 peak.
  2. Nickel-rich Indonesia is the biggest recipient of Chinese investment so far this year, according to a preliminary estimate of Chinese investments compiled by the American Enterprise Institute.
  3. Overseas mergers and acquisitions have plummeted as Beijing has tightened rules to curb capital flight.

Related Articles:

  • Exodus of Wealthy Chinese Accelerates with End of Covid Zero — China faced capital flight of roughly $150bn a year from citizens traveling overseas before the pandemic, estimated from unexplained gaps in global tourism data, with about 10,800 wealthy Chinese migrating in 2022. One private banker reports the cost of moving money offshore rose to 12 cents on the dollar from 1 cent.
  • Singapore Asks Banks to Keep Quiet on Wealth Inflows During China Boom — Singapore's central bank has asked major banks to minimize public discussion of the origins of large inflows of money into the city-state, much of it from wealthy Chinese, an issue that has become politically sensitive domestically. Lawyers and industry groups estimate Singapore hosts roughly 1,500 family offices, a large share of them Chinese.
  • The Mysterious $300 Billion Flow Out of China — Unexplained financial flows in China's balance of payments, which generally correspond to capital flight and other surreptitious efforts to move money abroad, have been relatively low in recent years, but that may be an illusion created by official reporting. Corresponding flows are hard to locate elsewhere, though the UK has experienced a surge in such unexplained flows.

AI Summary. China's job mix has shifted toward low-pay, low-skill, informal work at the expense of higher-paid, high-skill manufacturing and construction jobs, with the informal-to-formal ratio flipping from 40:60 to 60:40 over 15 years, according to a Stanford University estimate. Younger workers are over-represented in low-pay sectors and gig work.

George Magnus Financial Times
Date Posted:

.@georgemagnus1 notes that the ratio of low-pay, low-skill informal sector jobs to high-skilled jobs in China is now 60:40, the opposite of 15 years ago.

.@georgemagnus1 notes that the ratio of low-pay, low-skill informal sector jobs to high-skilled jobs in China is now 60:40,...

Is China's job mix shifting toward low-pay informal work?

Core argument: Stanford University professor Scott Rozelle says China's ratio of informal to formal sector jobs was 40:60 fifteen years ago and has now flipped.

A marked change in the occupational structure of jobs has meant that the proportion of low pay, low skill, informal sector jobs has been rising at the expense of higher paid, high skill jobs in manufacturing and construction. According to Stanford University professor Scott Rozelle, the ratio of informal to formal sector jobs 15 years ago was 40:60, but has now flipped. This is a particular problem for younger workers who are over-represented in low pay sectors and the gig economy.

Takeaways by Macro Roundup® AI

  1. Stanford University professor Scott Rozelle says China's ratio of informal to formal sector jobs was 40:60 fifteen years ago and has now flipped.
  2. China's occupational structure has shifted toward low-pay, low-skill, informal sector jobs at the expense of higher-paid, high-skill jobs in manufacturing and construction.
  3. Younger Chinese workers are over-represented in low-pay sectors and the gig economy, making the shift toward informal employment a particular problem for them.

Related Articles:

  • China’s Youth Left Behind As Jobs Crisis Mounts — China's unemployment rate for 16- to 24-year-olds reached 20.8%, the highest since the data series began in 2018 and above levels in European countries such as France and Italy. The national civil service examination drew a record 2.6mn applicants, nearly 2x the 2019 figure, with a 1.4% success rate.
  • Why Has Youth Unemployment Risen So Much in China? — Young workers aged 15-24 are particularly vulnerable when economic growth slows, and China's youth unemployment rate does not appear to be an outlier relative to its income level among global peers. Mismatches between the skills graduates acquire in higher education and those employers demand may add to labor market frictions.
  • Can China Fix Youth Unemployment Woes With Military Recruitment Drive? — More than 90% of China's military recruitment this year could come from recent graduates and high school students, which analysts say serves both the People's Liberation Army's modernisation targets and the country's record youth unemployment. Military academies remain less attractive to top students than leading public universities.

AI Summary. The California Department of Finance projects the state will have about 39.5m people in 2060, roughly the same as now, down from earlier projections of 45m and nearly 53m. The forecast has the population returning to its 2020 level in the 2030s and peaking in 2044.

Alexandre Tanzi and Eliyahu Kamisher Bloomberg
Date Posted:

California’s Department of Finance forecast the state’s population will be smaller in 2060 than it was in 2020.

Is California's long-term population growth coming to an end?

Core argument: The California Department of Finance projects California will have 39.5 million people in 2060, roughly the same as today, which could mark the end of more than a century of long-term population growth.

More than a century of long-term population growth in California could be over, according to new projections that show the state will have about the same number of people in 2060 as it does now. The California Department of Finance predicts that there’ll be 39.5 million people in the state by 2060. Just three years ago, forecasters were expecting the number to be 45 million — and a decade ago, the population was seen surging to almost 53 million. If there’s a bright spot in the forecast, the state is at least expected to recoup its pandemic population decline in the coming years — returning to its 2020 population level in the 2030s, before peaking in 2044.

Takeaways by Macro Roundup® AI

  1. The California Department of Finance projects California will have 39.5 million people in 2060, roughly the same as today, which could mark the end of more than a century of long-term population growth.
  2. California's long-range population forecast has fallen from almost 53 million a decade ago and 45 million three years ago to 39.5 million by 2060.
  3. California is expected to recoup its pandemic population decline, returning to its 2020 population level in the 2030s before peaking in 2044.

Related Articles:

  • Taxes, Revenues, and Net Migration In California — California's top income tax bracket shows the highest net out-migration rate, with departing high earners not replaced by other high earners at the same rate. Potential net outflows of taxable income reached nearly $4bn in the year federal tax reform took effect and $10.7bn around the COVID-19 pandemic.
  • The Population of California Declined, Again — California's population fell by 138,443 to 38.94 million, a third consecutive annual decline, according to state data. The main driver has been residents moving to other states such as Texas, Nevada, Idaho and Oregon, with net outmigration reaching a record 407,000 people and now spanning every education and income group.

AI Summary. US per capita carbon dioxide emissions have returned to their early-20th-century level, yet remain nearly 2x China's per capita level.

Our World In Data Staff Our World In Data
Date Posted:
Is Database:
Database

American per capita CO₂ emissions are back to the level prior to the United States’ entry into the First World War but remain almost 2X Chinese levels.

Related Articles:

  • War and Subsidies Have Turbocharged the Green Transition — Global capital spending on wind and solar assets rose from $357bn to $490bn, surpassing investment in oil and gas wells for the first time, aided by large subsidy programs in the US, Europe, and China. The International Energy Agency expects global renewable capacity to rise by 2,400 gigawatts over five years, nearly 30% above its earlier forecast.
  • Clean Energy Sets $1.1 Trillion Record That’s Bound to Be Broken — Global investment in the energy transition reached $1.1tn, matching investment in fossil fuels for the first time, according to clean energy research group BloombergNEF. The fossil fuel figure covers oil and gas across upstream, midstream and downstream segments plus power generation without emissions reduction technology.

AI Summary. Startup Fervo Energy completed a 30-day full-scale well test of enhanced geothermal technology at its northern Nevada site that generated 3.5 megawatts of electricity, with the project set to power Google data centers and infrastructure in the state. The company projects its Utah site will deliver about 400 megawatts.

Michelle Ma Bloomberg
Date Posted:

Fervo Energy is building a commercial geothermal facility that will power 300,000 Utah homes; the firm has started permitting on another half dozen facilities.

Fervo Energy is building a commercial geothermal facility that will power 300,000 Utah homes; the firm has started...

Can enhanced geothermal technology deliver reliable carbon-free power at scale?

Core argument: Fervo Energy completed a full-scale 30-day well test at its Project Red enhanced geothermal site in northern Nevada, which generated 3.5 megawatts of electricity.

In a landmark step for enhanced geothermal technology’s potential as a dependable carbon-free energy source, startup Fervo Energy has wrapped up a full-scale, 30-day well test at its Project Red site in northern Nevada, which was able to generate 3.5 megawatts of electricity. (One megawatt can power roughly 750 homes at once.) Project Red will connect to the grid later this year and power Google's data centers and infrastructure throughout Nevada. With the demo complete, Fervo is attempting to repeat its success at its southwest Utah site, which is currently under construction. With design improvements maximizing power output as expected, the Utah site is predicted to deliver about 400 megawatts by 2028, roughly enough electricity to power 300,000 homes at once.

Takeaways by Macro Roundup® AI

  1. Fervo Energy completed a full-scale 30-day well test at its Project Red enhanced geothermal site in northern Nevada, which generated 3.5 megawatts of electricity.
  2. Project Red is slated to connect to the grid and supply Google's data centers and infrastructure across Nevada.
  3. Fervo's southwest Utah site, under construction, is projected to deliver about 400 megawatts by 2028 — roughly enough to power 300,000 homes at once — if design improvements maximize power output as expected.

Related Articles:

  • This Geothermal Startup Showed Its Wells Can Be Used Like a Giant Underground Battery — Experiments at a geothermal startup's twin wells in Nevada found that pumping water underground and holding it builds pressure that flexes the rock, then produces higher-than-normal water output for hours once released. The results suggest geothermal plants could ramp electricity up or down and store energy for hours or days, acting like a large underground battery.

AI Summary. Wildfires in California and hurricanes in Florida have generated large volumes of insurance claims, while higher housing prices and construction and repair costs have made each claim more expensive. Insurers have also faced costlier reinsurance, with worldwide average reinsurance rates up about a quarter in one year and another third the next, according to reinsurance broker Howden Tiger.

Peter Coy New York Times
Date Posted:

Globally mean reinsurance rates rose by 25% in 20222 and are up 33% so far in 2023 according to reinsurance broker Howden Tiger. @petercoy

Globally mean reinsurance rates rose by 25% in 20222 and are up 33% so far in 2023 according to reinsurance broker Howden...

Why are home insurance costs rising in disaster-prone states?

Core argument: Average worldwide reinsurance rates rose by a quarter last year and by another third this year, according to London-based reinsurance broker Howden Tiger, part of Howden Group Holdings.

Wildfires in California and hurricanes in Florida produced lots of claims. Housing prices and bills for construction and repairs have gone up, making claims larger. And insurance companies have had to pay more for reinsurance: Worldwide, average rates for reinsurance rose by a quarter last year and by another third this year, according to the London-based reinsurance broker Howden Tiger, an arm of Howden Group Holdings.

Takeaways by Macro Roundup® AI

  1. Average worldwide reinsurance rates rose by a quarter last year and by another third this year, according to London-based reinsurance broker Howden Tiger, part of Howden Group Holdings.
  2. Wildfires in California and hurricanes in Florida generated large volumes of claims, while higher housing prices and construction and repair bills made each claim larger.
  3. Insurers face higher costs for reinsurance in addition to larger claims, contributing to California and Florida becoming almost uninsurable.

Related Articles:

  • Climate Shocks Are Making Parts of America Uninsurable. It Just Got Worse — State Farm, California's largest homeowner insurer, stopped accepting applications for most new home insurance policies statewide, citing rapidly growing catastrophe exposure. Florida faced a similar retreat by national carriers after Hurricane Andrew and responded with a market of small insurers backed by a state-mandated company providing windstorm coverage to homeowners who cannot obtain private insurance.
  • Farmers Insurance Limits Sales in Florida, California Amid Storm, Wildfire Risks — Farmers Insurance is limiting homeowners policy sales in Florida and California, hurricane- and wildfire-prone states, joining other large insurers in pulling back. In Florida it is ending sales of home, auto, and umbrella policies under its own brand — about 30% of the policies it sells there, affecting roughly 89,000 policies.
  • Your Homeowners’ Insurance Bill Is the Canary in the Climate Coal Mine — Average annual homeowners insurance costs about $1,900 nationwide but roughly $4,000 in New Orleans and $5,000 in Miami, with US premiums up 12% in a year and expected to keep rising. Insurers, facing about 20 billion-dollar disasters a year, are adopting pricing models that incorporate warming-climate costs and withdrawing from risky areas, shifting exposure to state-backed plans.