Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, September 7, 2023

AI Summary. U.S. job churn has returned to normal, but it remains unclear whether that is enough to slow wage growth to a pace consistent with the Federal Reserve's inflation target. A high-frequency measure of underlying wage growth for nonsupervisory workers outside retail, leisure, and hospitality has fallen from around 5% to 4%.

Matt Klein The Overshoot
Date Posted:

Job churn has normalized, however, it’s unclear whether recent growth in average hourly worker pay is consistent with the Fed’s 2% target. @M_C_Klein

Has normalized job churn slowed wage growth enough for the inflation target?

Core argument: The author's preferred measure of underlying wage growth—the three-month average monthly change in average hourly pay for nonsupervisory workers outside retail, leisure, and hospitality—fell to 4% in June–August after hovering near 5% since last summer.

It is unclear whether the normalization of churn that has already occurred will be sufficient to bring wage growth—and therefore consumer spending power—back in line with what would be consistent with the Fed’s inflation target. My preferred high-frequency measure of underlying wage growth has been the three-month average of the monthly change in average hourly pay for nonsupervisory workers outside of the retail, leisure, and hospitality industries. After hovering around 5% since last summer, it has come down sharply in the past three months to just 4% in June-August. That is encouraging news and seems to fit with the recent moves in the quit rate and the job openings rate.

Takeaways by Macro Roundup® AI

  1. The author's preferred measure of underlying wage growth—the three-month average monthly change in average hourly pay for nonsupervisory workers outside retail, leisure, and hospitality—fell to 4% in June–August after hovering near 5% since last summer.
  2. U.S. job churn has normalized while wage growth and underlying inflation have not, and it is unclear whether the normalization already achieved will bring wage growth into line with the Fed's inflation target.
  3. The recent deceleration in the author's underlying wage growth measure appears consistent with recent moves in the quit rate and the job openings rate.

Related Articles:

  • The Unresolved Tension Between Prices and Incomes — Persistent per-worker income growth of about 5% a year is difficult to reconcile with forecasts of 2% inflation, since inflation reflects the gap between nominal spending growth and real production, and wages are the largest source of financing for consumer spending. Interest rates may therefore fall more slowly than market prices imply.
  • Rate Cuts — The Federal Reserve might refrain from cutting interest rates if inflation does not fall enough, or if economic growth runs above potential, unemployment pushes below its 50-year low, and financial conditions ease further. In that case, policymakers could argue the short-run neutral rate is higher than common estimates, making current policy less restrictive than assumed.
  • The Unexpected Compression: Competition at Work in the Low Wage Labor Market — The authors estimate that post-pandemic labor market tightness compressed the US wage distribution, reducing the college wage premium and offsetting roughly one-quarter of the four-decade rise in 90-10 wage inequality. They attribute this in part to greater labor supply elasticity facing firms in low-wage markets, which reduced employer market power as young non-college workers moved to higher-paying jobs.

AI Summary. Inflation-adjusted average hourly pay for US production and nonsupervisory workers has risen 13% over 20 years, about 0.6% a year, while the average hourly wage for auto production-line workers has fallen 30%. General Motors, Ford and Stellantis earned a combined $42bn in net income over 12 months.

Justin Fox Bloomberg
Date Posted:
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The average hourly wage for auto workers has dropped 30% since 2003 and has converged with non-auto production workers. The UAW is attempting to arrest the trend, but the Big Three’s profits would be erased if they meet the UAW’s demands. @foxjust

Have autoworker wages fallen while other workers' pay rose?

Core argument: The average hourly wage for US production-line autoworkers has fallen 30% since 2003, even as inflation-adjusted average hourly pay for all US production and nonsupervisory employees rose 13% over the past 20 years, or 0.6% a year.

During the past 20 years, the inflation-adjusted average hourly wage of non-management US workers, also known as production and nonsupervisory employees, has risen 13%. That’s not exactly a rip-roaring pace — 0.6% a year. Then again, real hourly wages for production and nonsupervisory employees fell in the 1970s and 1980s and rose at only a 0.3% annual pace in the 1990s. The average hourly wage for autoworkers on the production line has dropped 30% since 2003. GM, Ford and Stellantis are all profitable, with a combined net income of $42B for the 12 months ended in June and the amount coming from their US operations probably adding up to somewhat less than $30B. Bloomberg reported last month that Ford and GM’s internal estimates of the costs of the UAW’s demands peg them at $80B per company over the next four years, which would wipe out all those profits and then some.

Takeaways by Macro Roundup® AI

  1. The average hourly wage for US production-line autoworkers has fallen 30% since 2003, even as inflation-adjusted average hourly pay for all US production and nonsupervisory employees rose 13% over the past 20 years, or 0.6% a year.
  2. Real hourly wages for US production and nonsupervisory employees fell during the 1970s and 1980s and rose at just a 0.3% annual pace in the 1990s.
  3. GM, Ford and Stellantis earned a combined $42 billion in net income for the 12 months ended in June, with US operations likely contributing somewhat less than $30 billion, while Ford and GM internally estimate the UAW's demands at $80 billion per company over four years, Bloomberg reported.

Related Articles:

  • EV Boom Remakes Rural Towns in the American South — Automakers have announced more than $110bn in electric-vehicle investments in the US, with about half directed to Southern states and most of the remainder to Great Lakes states including Michigan, Ohio and Indiana. Great Lakes auto employment, though still nearly double the South's, has fallen 34% over two decades to 382,000 workers.
  • Auto Union Boss Wants 46% Raise, 32-Hour Work Week in ‘War’ Against Detroit Carmakers — The United Auto Workers union has demanded a 46% raise, a return to traditional pensions, and a 32-hour work week from the three Detroit automakers. The companies say meeting those demands would raise labor costs by $80bn and lift total pay and benefit expenses to more than $150 an hour from about $64.

AI Summary. The nominal yield spread is negative and low by historical standards, implying a 65% probability of recession within 12 months, while the inflation-adjusted interest rate spread implies about 40%. Even taken at face value, probabilities in the 40–60% range leave a fair likelihood of a soft landing.

Christopher Neely Federal Reserve Bank of St. Louis
Date Posted:

The nominal yield curve spread predicts a 65% probability of a recession within a year, “unprecedentedly” high for a false recession signal. Real spreads imply a 40% probability, the highest in the history of the series. @stlouisfed

How likely is a recession according to yield spreads?

Core argument: The negative nominal yield spread, quite low by historical standards, implies a 65% probability of recession within 12 months, a level that would be unprecedentedly high for a false positive.

The nominal yield spread is currently negative—quite low by historical standards—and predicts a 65% probability of recession in 12 months. This recession probability would be unprecedentedly high for a false positive. The “real” interest rate spread implies a still elevated, but lower probability of recession in 12 months, of about 40%. This 40% probability is the highest in the history of the series, exceeding that even in any actual recession. Even if a model were literally correct instead of an approximation, these models predict 40%, 50%, and 60% probabilities of recessions, which means there is a fair likelihood of a soft landing.

Takeaways by Macro Roundup® AI

  1. The negative nominal yield spread, quite low by historical standards, implies a 65% probability of recession within 12 months, a level that would be unprecedentedly high for a false positive.
  2. The "real" interest rate spread implies a roughly 40% probability of recession within 12 months, the highest in the history of the series, exceeding readings in any actual recession.
  3. Because the yield-spread models predict 40%, 50%, and 60% recession probabilities, there remains a fair likelihood of a soft landing even if a model were literally correct rather than an approximation.

Related Articles:

  • Soft Landing Summer — The estimated 12-month US recession probability has been cut to 15%, matching the postwar unconditional average implied by a recession occurring roughly once every seven years, and far below the 60% Bloomberg consensus. The authors expect interest rates to fluctuate in a higher range than in the post-2008 period.
  • Has the Fed Tightened Enough? Guideposts to Consider — Wage growth of about 2.5% would be consistent with 2% inflation given low recent-trend productivity growth, but wage growth is running near 4.5%. On this view inflation is more likely to level out at its current rate than keep falling, pushing the Federal Reserve toward further tightening through rate rises or holding rates high.

AI Summary. Polling shows the Democratic presidential candidate's support among nonwhite voters running well below his prior election standing across racial groups, with leads of 72-11 among Black voters, 47-35 among Hispanic registrants, and 40-39 among other nonwhite voters. About 5% of his former nonwhite voters now back the Republican candidate, including 8% of Hispanic voters.

Nate Cohn New York Times
Date Posted:
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Racial polarization in voting has been declining since 2012 in the US. @Nate_Cohn finds Biden underperforming relative to 2020 in current polling with non-white voters; 5% of 2020 non-white Biden voters now say they support Trump.

Is Democratic support among nonwhite voters slipping across racial groups?

Core argument: Biden leads 72-11 among Black voters and 47-35 among Hispanic registrants, tallies well beneath his standing in the last election, according to the survey.

Mr. Biden’s weakness among nonwhite voters is broad, spanning virtually every demographic category and racial group, including a 72-11 lead among Black voters and a 47-35 lead among Hispanic registrants. The sample of Asian voters is not large enough to report, though nonwhite voters who aren’t Black or Hispanic — whether Asian, Native American, multiracial or something else — back Mr. Biden by just 40-39. In all three cases, Mr. Biden’s tallies are well beneath his standing in the last election. The survey finds evidence that a modest but important 5% of nonwhite Biden voters now support Mr. Trump, including 8% of Hispanic voters who say they backed Mr. Biden in 2020.

Takeaways by Macro Roundup® AI

  1. Biden leads 72-11 among Black voters and 47-35 among Hispanic registrants, tallies well beneath his standing in the last election, according to the survey.
  2. Nonwhite voters who are neither Black nor Hispanic — Asian, Native American, multiracial or other — back Biden by 40-39, with the Asian sample too small to report separately.
  3. The survey finds that 5% of nonwhite Biden voters now support Trump, including 8% of Hispanic voters who say they backed Biden in 2020.

Related Articles:

  • Can Democrats Survive the Looming Crisis in New York City’s Outer Boroughs? — Just over a third of the decline in the Democratic margin of victory came from the suburbs, with New York City voters—through a mix of defection and abstention—accounting for most of the rest. Precincts that are at least three-quarters Hispanic or Asian swung 58 and 52 points toward Republicans, versus 32 points in white and 8 points in black precincts.
  • The Unsettling Truth About Trump’s First Great Victory — Swedish lottery data indicate that windfall wealth raises the short- and medium-run probability of marriage, an effect driven by male winners. When the winner is a married woman, the authors estimate that a 1M-krona windfall nearly doubles the short-run divorce rate, an effect that fades in the long run.
  • Five Reasons Why Biden Might Lose in 2024 — Working-class voters are projected to outnumber college-educated voters by roughly half again in the US presidential electorate, so slippage among them carries outsize weight. The author argues that if Republicans matched their 13-point national House margin among working-class voters, Democrats would need a college-educated advantage above 30 points to offset it.

AI Summary. The Pentagon plans to field thousands of air-, land- and sea-based artificial-intelligence systems, drones and autonomous platforms within two years to counter threats from China and other adversaries, spending hundreds of millions of dollars on systems intended to be "small, smart, cheap.

Nancy Youssef and Michael Gordon Wall Street Journal
Date Posted:

The US military intends to field thousands of “cheap” drones and autonomous systems within the next two years to counter threats from China and other adversaries.

The US military intends to field thousands of “cheap” drones and autonomous systems within the next two years to...

Will thousands of small, cheap autonomous systems counter China's military threat?

Core argument: The Pentagon plans to field thousands of air-, land- and sea-based AI systems, drones and autonomous platforms within the next two years to counter threats from China and other adversaries.

The Pentagon intends to field a vast network of AI-powered technology, drones and autonomous systems within the next two years to counter threats from China and other adversaries. Kathleen Hicks, the deputy secretary of defense, provided new details in a speech Wednesday about the department’s plans to spend hundreds of millions of dollars to produce an array of thousands of air-, land- and sea-based artificial-intelligence systems that are intended to be “small, smart, cheap.”

Takeaways by Macro Roundup® AI

  1. The Pentagon plans to field thousands of air-, land- and sea-based AI systems, drones and autonomous platforms within the next two years to counter threats from China and other adversaries.
  2. Deputy Secretary of Defense Kathleen Hicks said the department will spend hundreds of millions of dollars on artificial-intelligence systems designed to be "small, smart, cheap.".

Related Articles:

  • U.S. Weapons Industry Unprepared for a China Conflict, Report Says — A Center for Strategic and International Studies report argues the U.S. defense industrial base is not prepared for the current security environment and operates in a manner better suited to peacetime. The study recommends reassessing total munitions requirements and stockpile replenishment needs, creating a strategic munitions reserve, and setting a sustainable procurement plan.
  • Military Briefing: Ukraine War Exposes ‘Hard Reality’ of West’s Weapons Capacity — 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.
  • Interest Costs Will Grow the Fastest Over the Next 30 Years — The Congressional Budget Office projects federal spending will reach 29.1% of GDP over three decades, with net interest on the national debt rising from 1.9% of GDP to 6.7%, or $5.4tn. Under that projection, interest becomes the largest single federal budget line item, surpassing Social Security, Medicare, and Medicaid.

Friday, September 8, 2023

AI Summary. The real annual cost of U.S. weather and climate disasters has risen from about $20bn per year in the 1980s to nearly $95bn per year in 2010–19, reaching roughly $153bn in one year. Property insurers absorbed 48% of these costs, uninsured or underinsured homeowners, businesses and farms 37%, the federal government 11%, and state and local governments 4%.

Celso Brunetti, Benjamin Dennis, Gurubala Kotta and Adam Smith Federal Reserve Board
Date Posted:

Damages from US weather events that cost >$1B have risen from $20B annually during the 1980s to $95B a year between 2010-2019, and $153B in 2021. Property insurers, who bear 48% of these costs, are beginning to reduce coverage. @FedResearch

How much have weather disaster costs risen, and who pays them?

Core argument: The real cost of U.S. weather and climate disasters rose from $20bn per year in the 1980s to nearly $95bn per year in 2010–19, with damages reaching about $153bn in 2021.

Nationally, the real cost of [weather and climate] disasters has risen from $20B per year in the 1980s to nearly $95B per year during the period 2010–19. In 2021, damages increased to about $153B. Costs were absorbed by four entities: property insurers (48%), uninsured or underinsured homeowners, businesses, and agricultural entities (37%), the federal government (11%), and state and local governments (4%). If property insurers were to exit certain markets or decrease coverage in states with greater exposure to physical risks due to decreased profitability, a larger share of damages would not be fully insured. Two major insurers recently announced that they will no longer accept new applications for business and personal property insurance coverage in California, citing increasing wildfire risk as a key factor in that decision. In addition, several major hurricanes during 2020-22 forced numerous insurance companies into bankruptcy in Louisiana and Florida.

Takeaways by Macro Roundup® AI

  1. The real cost of U.S. weather and climate disasters rose from $20bn per year in the 1980s to nearly $95bn per year in 2010–19, with damages reaching about $153bn in 2021.
  2. Disaster costs were absorbed by property insurers (48%), uninsured or underinsured homeowners, businesses and agricultural entities (37%), the federal government (11%), and state and local governments (4%).
  3. Two major insurers announced they will no longer accept new business and personal property insurance applications in California, citing increasing wildfire risk, while major hurricanes during 2020–22 forced numerous insurers in Louisiana and Florida into bankruptcy.

Related Articles:

  • Home Insurers Are Charging More and Insuring Less — Arizona, Texas, North Carolina, Oregon, Illinois and Utah approved the largest home-insurance rate increases, ranging from 20% to 30%, while some insurers have stopped selling new policies in states such as California and pulled back from disaster-prone areas. Reinsurance premiums, which insurers buy to offload risk, rose 33% to 50% at recent renewals.
  • Why California and Florida Have Become Almost Uninsurable — 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.
  • How a Small Group of Firms Changed the Math for Insuring Against Natural Disasters — Reinsurance prices rose as much as 40% year over year, according to a report by brokerage Gallagher Re, prompting insurers to change where and what they cover. State Farm and Allstate cited reinsurance market conditions and costs in curtailing some California business, and agricultural reinsurers announced exits from Iowa.

AI Summary. Modelling of a global net-zero emissions scenario projects slower growth than a baseline scenario, with average global GDP growth of 2.0% a year rather than 2.3% through 2030 and 1.9% rather than 2.1% thereafter. Global GDP is projected to be 2.6% below baseline in 2030 and 5.6% below in 2050.

Jean Fouré, Rob Dellink, Elisa Lanzi and Filippo Pavanello Organisation for Economic Co-operation and Development
Date Posted:

OECD analysis projects that achieving net zero carbon emissions by 2050 will reduce global GDP by 5.6% relative to the current baseline.

Does reaching net-zero emissions slow global GDP growth?

Core argument: The net-zero emissions (NZE) Ambition scenario reduces global GDP relative to the Baseline by 2.6% in 2030 and 5.6% in 2050, even as the global economy continues to grow over time.

While the global economy keeps growing over time, the NZE Ambition [net zero emissions] scenario results in a slowdown of GDP growth, both between 2019 and 2030 and between 2030 and 2050. The average global GDP growth rate goes from 2.3% per annum in the Baseline between 2019 and 2030 to 2.0% and decreases from 2.1% between 2030 and 2050 in the Baseline scenario to 1.9% in the NZE Ambition scenario. This leads to a reduction of global GDP compared to Baseline by 2.6% in 2030 and 5.6% in 2050.

Takeaways by Macro Roundup® AI

  1. The net-zero emissions (NZE) Ambition scenario reduces global GDP relative to the Baseline by 2.6% in 2030 and 5.6% in 2050, even as the global economy continues to grow over time.
  2. Average global GDP growth under the NZE Ambition scenario falls to 2.0% per annum over 2019–2030, versus 2.3% in the Baseline scenario.
  3. Between 2030 and 2050, global GDP growth declines from 2.1% per annum in the Baseline to 1.9% in the NZE Ambition scenario.

Related Articles:

  • Growing Pains: The Renewable Transition in Adolescence — In an illustrative scenario, a California system with 20 GW of wind, 150 GW of solar and 75 GW of storage would provide only 50 GW of reliable capacity, since each added renewable unit contributes less to reliability. Levelized cost measures ignore this, so grid operators and utilities instead assess effective load-carrying capability.
  • What Have We Learned About the Neutral Rate? — Analysts estimate that if inflation is brought down without a recession, the Federal Reserve's policy rate will stabilize nearer 3–3.25% than the 2.5% longer-run median projection of Federal Reserve officials. Projected shifts in government debt and demographics imply a roughly 0.5 percentage point net increase in the neutral rate over the next decade.

AI Summary. High interest rates have discouraged homeowners from moving and taking on more expensive mortgages, leaving an unusually low inventory of homes for sale. Sales of previously owned homes are down about 36% from their earlier peak, while prices are generally holding firm outside a few trouble spots.

Nicole Friedman Wall Street Journal
Date Posted:

Home prices rose in July after declining for five consecutive months. High interest rates have kept inventories very low across all markets.

Are home prices holding firm despite falling sales?

Core argument: Sales of previously owned U.S. homes are down about 36% from January 2022, yet home prices are generally holding firm outside a few trouble spots.

High interest rates have prompted homeowners to stay put rather than buy new homes and take on more expensive mortgages, resulting in an unusually low inventory of homes for sale. Sales of previously owned homes are now down about 36% from January 2022. But prices are generally holding firm outside of a few trouble spots.

Takeaways by Macro Roundup® AI

  1. Sales of previously owned U.S. homes are down about 36% from January 2022, yet home prices are generally holding firm outside a few trouble spots.
  2. High interest rates have prompted homeowners to stay put rather than buy new homes and take on more expensive mortgages, leaving an unusually low inventory of homes for sale.

Related Articles:

  • The “New Normal” Mortgage Rate Range — Goldman Sachs economists expect the federal funds rate to eventually stabilize at 3–3.25%, above what the Federal Reserve currently projects for the neutral rate. With a funds rate near 3.25% and a 10-year Treasury yield of 4.45%, 30-year fixed mortgage rates would sit in the low-to-mid 6% range.
  • The Great Pandemic Mortgage Refinance Boom — Fourteen million mortgages were refinanced during the COVID-era refinance boom: roughly 5m borrowers extracted a total of $430bn in home equity, while 9m refinanced without extracting equity and cut their aggregate annual housing costs by $24bn.
  • Have Rising Mortgage Rates Frozen the Housing Market? — 42% of American homeowners own their homes outright with no mortgage, and among those with mortgages the median housing debt is 52% of the home's value. Homeowners with large equity cushions should be less affected by "lock-in" from low pandemic-era mortgage rates.

AI Summary. Since 1980, the gap between white and Black voter turnout has been related to the share of Black registered voters backing Democrats in pre-election polls, meaning Black voters who don't support Democrats tend not to vote. Polls showing weaker Democratic support among Black voters may therefore signal a smaller Black share of the electorate.

Nate Cohn New York Times
Date Posted:
Is Database:
Database

.@Nate_Cohn argues that current polling suggests a significant decline in black turnout in 2024 relative to 2020.

Does weaker Democratic polling among Black voters signal lower Black turnout?

Core argument: Since 1980, the racial turnout gap between white and Black voters has tracked with the share of Black registered voters backing Democrats in pre-election polls, suggesting that when Black voters do not support Democrats, they tend not to vote.

Looking back over the last few decades, there’s a clear relationship between the racial turnout gap — the difference between white and Black turnout — and the proportion of Black registered voters who back Democrats in pre-election polls since 1980. Or put differently: When Black voters don’t support Democrats, they tend not to vote. It’s possible that the Black voters who back Mr. Trump in the polls today will ultimately show up for him next November. But for now, when I see Mr. Biden’s share among Black voters slip into the 60s and 70s in the polls, I mostly see yet another decline in the Black share of the electorate, at least “if the election were held today.” If there’s any good news for Mr. Biden here, it’s that the election is still 14 months away.

Takeaways by Macro Roundup® AI

  1. Since 1980, the racial turnout gap between white and Black voters has tracked with the share of Black registered voters backing Democrats in pre-election polls, suggesting that when Black voters do not support Democrats, they tend not to vote.
  2. Biden's polling share among Black voters slipping into the 60s and 70s points mainly to a further decline in the Black share of the electorate if the election were held today.
  3. Black voters who back Trump in current polls may ultimately turn out for him, and the election remains 14 months away.

Related Articles:

  • Consistent Signs of Erosion in Black and Hispanic Support for Biden — Polling shows the Democratic presidential candidate's support among nonwhite voters running well below his prior election standing across racial groups, with leads of 72-11 among Black voters, 47-35 among Hispanic registrants, and 40-39 among other nonwhite voters. About 5% of his former nonwhite voters now back the Republican candidate, including 8% of Hispanic voters.

AI Summary. India's military has commissioned a study of how a war over Taiwan involving the US and its allies would affect India and how it could respond. Options under study include serving as a logistics hub for allied warships, aircraft and armies, or engaging China directly along their shared northern border.

Sudhi Ranjan Sen Bloomberg
Date Posted:

India’s military has started high-level planning for how India would manage a Taiwan contingency; ranging from serving as a logistics hub to opening a new theater of war along the India-China border.

How would India respond to a war over Taiwan?

Core argument: India's Defense Chief General Anil Chauhan has commissioned a study of the wider impact of any war over Taiwan involving the US and its allies, and what action India could take in response.

Defense Chief General Anil Chauhan — India’s top military commander — commissioned a study to examine the wider impact of any war over the island that also involves the US and its allies, and what action India could take in response. One option the Indian military will study involves serving as a logistics hub to provide repair and maintenance facilities for allied warships and aircraft, as well as food, fuel and medical equipment for armies resisting China. A more extreme scenario would assess the potential for India to get directly involved along their northern border, opening a new theater of war for China. While no deadline has been set to complete the study, the Indian military is under orders to finish it as soon as possible, one of the officials said.

Takeaways by Macro Roundup® AI

  1. India's Defense Chief General Anil Chauhan has commissioned a study of the wider impact of any war over Taiwan involving the US and its allies, and what action India could take in response.
  2. One option under study would have India serve as a logistics hub providing repair and maintenance for allied warships and aircraft, plus food, fuel and medical equipment for armies resisting China.
  3. A more extreme scenario would assess India getting directly involved along the northern border with China, opening a new theater of war; no deadline has been set, though the Indian military is under orders to finish the study as soon as possible.

Related Articles:

  • US and India Announce Defence and Technology Deals During Visit By Narendra Modi — The US and India announced defense and technology agreements including an Indian purchase of armed MQ-9B SeaGuardian drones from General Atomics, a $2.75bn Micron semiconductor assembly and test facility in India with $800mn from the company, and General Electric co-producing fighter jet engines in India.
  • Indian Stock Market Surges as Foreign Funds Buy Into National Growth Story — Indian equities rose $440bn to more than $3.5tn in value, making India the world's fifth-largest stock market after the US, China, Japan, and Hong Kong, ahead of France and the UK. Foreign portfolio investors added a net $9.4bn to Indian shares in the quarter, with analysts attributing the bulk of this year's inflows to passive index buying.
  • India Equity: An Unsung Long-Term Performance Story — Cumulative total returns for Indian equities have been comparable to or better than US equities over roughly three decades, while Chinese equities have lagged both, according to index data for the MSCI India, S&P 500, and MSCI China indexes.