Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, October 9, 2023

AI Summary. Gallup survey data across 73 countries finds an average of 20% of workers thriving and engaged, 15% actively disengaged, and the remaining 65% disengaged but still employed. Among large economies, the US and India had the highest shares of thriving workers at roughly one-third, while Italy and Japan had the lowest at 5%.

Economist Staff The Economist
Date Posted:

Almost 35% of Americans are engaged at work relative to just 5% of Japanese, 7% of French workers, 10% of Britons, and 17% of Germans.

How many workers worldwide are actually engaged at work?

Core argument: Gallup's data across 73 countries show an average of 20% of workers thriving and 15% loud quitting, leaving 65% quietly dragging their feet.

Gallup suggests that remarkably few people, just about anywhere, are happily engaged with their work. The average of the 73 countries in our filtered version showed that 20% were thriving and 15% were loud quitters. The remaining 65% were quietly dragging their feet. Among big economies, America and India had the highest share of thrivers, though that was only around one-third. In Italy and Japan just 5% were thriving, the lowest shares in the sample.

Takeaways by Macro Roundup® AI

  1. Gallup's data across 73 countries show an average of 20% of workers thriving and 15% loud quitting, leaving 65% quietly dragging their feet.
  2. Among large economies, the United States and India had the highest shares of thriving workers in Gallup's sample, at around one-third.
  3. Italy and Japan recorded the lowest shares of thriving workers in Gallup's 73-country sample, at 5% each.

Related Articles:

AI Summary. Analysts estimate that tighter financial conditions from higher interest rates imply a roughly ½ percentage point drag on GDP growth over the following year — meaningful but not enough to threaten recession. They also estimate that if the equity risk premium fell to its historical median, growth would take a 1 percentage point hit.

David Mericle and David Mericle Goldman Sachs
Date Posted:

A @GoldmanSachs analysis argues that, if equity valuations were to fall towards historical norms, there would be a large hit to GDP growth.

How much do higher interest rates drag on growth?

Core argument: Goldman Sachs' financial conditions index growth impulse model implies a roughly -0.5pp hit to GDP growth over the next year, meaningful but much less than last year and too little to threaten recession.

The main implication of the further tightening in financial conditions led by rising rates is that the drag on GDP growth will last longer. Our financial conditions index (FCI) growth impulse model now implies a roughly -½pp hit to growth over the next year, meaningful but much less than last year and too little to threaten recession. In financial markets, the key risk is that valuation measures that are benchmarked to interest rates are now higher for some assets, most importantly stocks. We estimate that if the equity risk premium fell to its 50th historical percentile, the hit to GDP growth over the following year would be 1pp. If it fell to its average level in the pre-GFC years, the hit would be 0.75pp.

Takeaways by Macro Roundup® AI

  1. Goldman Sachs' financial conditions index growth impulse model implies a roughly -0.5pp hit to GDP growth over the next year, meaningful but much less than last year and too little to threaten recession.
  2. The main implication of the further tightening in financial conditions led by rising rates is that the drag on GDP growth will last longer.
  3. If the equity risk premium fell to its 50th historical percentile, the estimated hit to GDP growth over the following year would be 1pp, and 0.75pp if it fell to its average level in the pre-GFC years.

Related Articles:

  • 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.
  • Measuring the Natural Rate of Interest After COVID-19 — Model estimates for the United States, Canada, and the Euro Area place the natural rate of interest within a few tenths of a percentage point of pre-pandemic estimates, with the main longer-term consequence of the pandemic a reduction in the natural rate of output. The authors find no evidence that the era of historically low natural rates has ended.
  • In Search of Safe Havens: The Trust Deficit and Risk-free Investments! — Plotting US Treasury bond rates against a crude fundamental risk-free rate—actual inflation plus real GDP growth—undercuts the argument that central banks set interest rates. Central banks can nudge rates at the margin but cannot override the fundamentals of inflation and real growth.

AI Summary. Real interest rates have risen by almost 10 percentage points, compared with 4 points during the 2004–2006 tightening, yet activity has held up because households entered the episode with large savings accumulated during the pandemic. As those surplus savings are used up and borrowers refinance at higher rates, the full impact of tightening has not yet been felt.

Jesper Rangvid Rangvid's Blog
Date Posted:

Jesper Rangvid argues the hiking cycle hasn’t catalyzed a recession yet due to the accumulation of savings, but notes that “surplus savings will soon be used up.”

Have pandemic savings delayed the full impact of higher interest rates?

Core argument: Real interest rates have risen by almost 10 percentage points in this tightening episode, compared with a rise of "only" 4 percentage points during the 2004–2006 episode.

Real interest rates have risen even more than nominal. Real interest rates have risen by almost 10pp. In comparison, real interest rates rose by “only” 4pp during the 2004-2006 episode. The main reason that economic activity has held up so well is that households entered this tightening episode with large savings that they had accumulated during the pandemic. Therefore, the pandemic caused both inflation and the flare-up in interest rates and led to this amazingly resilient economy. However, surplus savings will soon be used up, and at some point people will have to take out new mortgages at higher interest rates. Moreover, central banks have continued to raise interest rates in 2023 and will keep them high for longer. All this means that the full impact of this tightening episode has not yet been felt.

Takeaways by Macro Roundup® AI

  1. Real interest rates have risen by almost 10 percentage points in this tightening episode, compared with a rise of "only" 4 percentage points during the 2004–2006 episode.
  2. The main reason economic activity has held up so well is that households entered this tightening episode with large savings accumulated during the pandemic, which caused both inflation and the flare-up in interest rates.
  3. Surplus savings will soon be used up, borrowers will eventually have to take out new mortgages at higher rates, and central banks will keep rates high for longer, so the full impact of tightening has not yet been felt.

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.
  • Excess No More? Dwindling Pandemic Savings — Research on U.S. household savings after the pandemic recession points to rapid accumulation and then drawdown of excess savings, with cumulative drawdowns exceeding $1.9tn and less than $190bn of excess savings remaining in the aggregate economy. The authors estimate that if recent drawdown rates persist, aggregate excess savings would be depleted.
  • The Trickling Up of Excess Savings — The authors argue that excess savings created by debt-financed government transfers do not disappear as households spend them down; instead they "trickle up" to wealthier households with lower propensities to spend, so the boost to aggregate demand fades only slowly. Their benchmark estimate puts this at roughly 5 years rather than a few quarters.

AI Summary. Market pricing repeatedly resisted the Federal Reserve's "higher for longer" path, betting on low terminal rates and aggressive cuts, which eased financial conditions and made further rate hikes more likely. Pricing now aligns with Federal Reserve guidance for one more hike, while rising long-dated yields and a stronger dollar raise the prospect of overly tight financial conditions.

Joseph Wang Fed Guy Blog
Date Posted:

.@FedGuy12 argues that the hiking cycle may be done, as recent market moves such as the move up in long rates and a strengthening dollar have tightened financial conditions, negating the need for further Fed hikes.

Does market pushback against central bank guidance make rate hikes more likely?

Core argument: Market pricing over the past two years has persistently resisted the Federal Reserve's "higher for longer" path, pricing relatively low terminal rates and aggressive rate cuts, which eased financial conditions and in effect stimulated the economy, paradoxically making further rate hikes more likely.

Market pricing over the past two years has persistently pushed back against the Fed’s “higher for longer” path and stubbornly priced both relatively low terminal rates and aggressive rate cuts. This paradoxically made rate hikes even more likely by easing financial conditions and in effect stimulating the economy. Market pricing is now largely in line with the September dot-plot, which guides towards one additional hike even as recent data has been very encouraging. The rise in longer dated yields and strengthening dollar do not appear to have been anticipated by Fed officials and raise the prospect of financial conditions becoming too tight.

Takeaways by Macro Roundup® AI

  1. Market pricing over the past two years has persistently resisted the Federal Reserve's "higher for longer" path, pricing relatively low terminal rates and aggressive rate cuts, which eased financial conditions and in effect stimulated the economy, paradoxically making further rate hikes more likely.
  2. Market pricing is now largely aligned with the Fed's September dot-plot, which guides toward one additional hike even as recent data has been very encouraging.
  3. The rise in longer-dated yields and the strengthening dollar do not appear to have been anticipated by Fed officials and raise the prospect of financial conditions becoming too tight.

Related Articles:

  • 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 Case for “Higher for Longer”: Prices are Disinflating, But Not Wages (Yet) — Occupations with the fastest pay gains have seen wage growth normalize while pay growth elsewhere remains persistently faster, with only modest deceleration from the peak. The author argues the neutral policy rate has risen as an investment drought ends, making 5.5% short-term rates unremarkable and 4% 10-year Treasury yields potentially too low.
  • 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. The U.S. said it would build an additional stretch of wall on the Mexican border in the Rio Grande Valley, using funds Congress appropriated for wall construction, and begin deporting thousands of Venezuelans. Venezuelans are the second-largest nationality group crossing the southern border, after Mexicans.

Miriam Jordan, Eileen Sullivan and Zolan Kanno-Youngs New York Times
Date Posted:

The Biden administration will start deportations and has waived federal regulations in an effort to speed up border wall construction as illegal immigration into the United States surges. 200,000 people were arrested at the border in September.

Is the U.S. expanding the border wall and deporting Venezuelans?

Core argument: A record 50,000 Venezuelans crossed the U.S. southern border in a single month, and Venezuelans now represent the second-largest nationality group among crossers, behind Mexicans.

The Biden administration said it would expand former President Donald Trump’s wall on the Mexican border and begin deporting thousands of Venezuelans in an effort to cut down on the migrant surge that shows no signs of abating. Last month alone, 50,000 Venezuelans crossed the southern border, a record number, and they now represent the second largest nationality group, dwarfed only by Mexicans. The U.S. Border Patrol in the Rio Grande Valley, where the new stretch of the wall is to be built, had encountered more than 245,000 migrants who had entered the country between ports of entry, or unlawfully, in the 2023 fiscal year that ended Sept. 30, the notice said. It added that construction would be built with funds appropriated by Congress in 2019 for wall construction in the Rio Grande Valley.

Takeaways by Macro Roundup® AI

  1. A record 50,000 Venezuelans crossed the U.S. southern border in a single month, and Venezuelans now represent the second-largest nationality group among crossers, behind Mexicans.
  2. The Biden administration said it would expand former President Donald Trump's wall on the Mexican border and begin deporting thousands of Venezuelans to curb a migrant surge that shows no signs of abating.
  3. U.S. Border Patrol in the Rio Grande Valley, the site of the planned wall segment, encountered more than 245,000 migrants who entered between ports of entry or unlawfully in the 2023 fiscal year, with construction funded by 2019 congressional appropriations.

Related Articles:

  • Rebound in Immigration Comes to Economy’s Aid — Goldman Sachs analysis found average monthly growth in the US foreign-born labor force is about 65,000 higher than in 2022, with that labor force nearing 32m people. Foreign-born workers' share of the labor force reached a record 18% in 2022 and has averaged 18.5% this year.
  • U.S. Bound Migrants Surge at Darien Jungle Crossing in Panama — Panamanian immigration data show 49,291 migrants crossed the Darien Gap rainforest between Colombia and Panama en route to the U.S. over a two-month span, more than a fivefold increase from 8,964 in the same period a year earlier. Chinese nationals accounted for about 2,200 of those crossings, up from 71.
  • Immigrants & Their Kids Were 70% of U.S. Labor Force Growth Since 1995 — U.S. labor force data show immigrants accounted for 49% of labor force growth over roughly the past three decades and their children another 21%, together about 70% of an increase of nearly 32.8m workers. Immigrants rose from about 10% to 18% of the labor force, and immigrants plus their children from 18% to 29%.

AI Summary. Exports from 15 of China's central and western provinces have risen 94% and now total $630bn over 12 months, exceeding India's $425bn, Mexico's $590bn, and Vietnam's $346bn. Over the same span, exports rose 41% from India, 43% from Mexico, and 56% from Vietnam.

Jason Douglas Wall Street Journal
Date Posted:

Exports from China’s western provinces are up 94% since 2018, reaching $630B in the year ending August, vs. India’s $425B, Mexico’s $590B, and Vietnam’s $346B.

Is China's manufacturing moving inland rather than to other countries?

Core argument: Exports from 15 of China's central and western provinces have risen 94% since the start of 2018, outpacing India's 41%, Mexico's 43%, and Vietnam's 56% over the same span, according to official figures compiled by CEIC.

Since the start of 2018, exports from 15 of China’s central and western provinces have rocketed 94%. In the 12 months through August, those provinces exported a combined $630 billion—more than India’s $425 billion, Mexico’s $590 billion, and Vietnam’s $346 billion over the same period, according to official figures compiled by data provider CEIC. Since the beginning of 2018, exports from India have risen 41%, exports from Mexico have risen 43%, and exports from Vietnam have increased 56%.

Takeaways by Macro Roundup® AI

  1. Exports from 15 of China's central and western provinces have risen 94% since the start of 2018, outpacing India's 41%, Mexico's 43%, and Vietnam's 56% over the same span, according to official figures compiled by CEIC.
  2. In the 12 months through August, China's 15 central and western provinces exported a combined $630 billion, exceeding Mexico's $590 billion, India's $425 billion, and Vietnam's $346 billion.

Related Articles:

  • How America Is Failing To Break Up With China — Research finds that countries with the strongest existing trade ties to China in a given industry have gained the most as direct Chinese exports to the US are redirected, suggesting Chinese supply chains remain central to American imports even in advanced-manufacturing goods officials most want to shield from China.
  • Mexico Seeks to Solidify Rank As Top U.S. Trade Partner, Push Further Past China — Mexico is the top U.S. trading partner, accounting for 15.4% of all U.S. goods trade versus 15.2% for Canada and 12.0% for China, with four-month bilateral trade of $263bn. Manufactured goods made up $234.2bn of that total, with $157bn of Mexican imports and $107bn of U.S. exports.
  • Global Supply Chains: The Looming “Great Reallocation” — Data point to a reallocation rather than deglobalization of US supply chains: direct US sourcing from China has declined while import shares from low-wage Vietnam and nearby Mexico have risen. China's import share in the EU, Mexico, and Vietnam has increased, and Chinese firms are expanding investment and production there.

AI Summary. Chinese individuals are normally permitted to wire only $50,000 a year overseas, and underground remittance networks fill the gap, with some private bankers passing contact information for such agencies to trusted clients. UBS estimated there were 6.2m Chinese with assets above $1m at the end of 2022.

Lulu Yilun Chen Bloomberg
Date Posted:

As Chinese have become more wealthy, they have increasingly sought to evade capital controls by moving money out of China through informal networks, often using Hong Kong as a conduit.

How do wealthy Chinese move money past strict capital controls?

Core argument: Chinese individuals are normally permitted to wire only $50,000 a year overseas, plus a one-time transfer when they emigrate, with underground remittance networks plugging the gap.

Opportunities to move cash legitimately from China are severely limited, with individuals normally allowed to wire only $50,000 a year overseas. They also have a one-time opportunity to move their money when they emigrate. Plugging the gap is where the underground networks come into play. Two other private bankers at different European banks say that while on the books they can’t help clients avoid capital controls, they do pass on contact information for underground remittance agencies for close and trusted customers. The explosion in wealth in China over the past decades means there’s plenty of potential demand. UBS Group AG, for example, estimated in its annual wealth report that there were 6.2 million Chinese with assets of more than $1 million at the end of 2022.

Takeaways by Macro Roundup® AI

  1. Chinese individuals are normally permitted to wire only $50,000 a year overseas, plus a one-time transfer when they emigrate, with underground remittance networks plugging the gap.
  2. UBS Group AG estimated in its annual wealth report that 6.2 million Chinese held assets of more than $1 million at the end of 2022, indicating substantial potential demand.
  3. Two private bankers at different European banks say that while on the books they cannot help clients avoid China's capital controls, they pass contact information for underground remittance agencies to close and trusted customers.

Related Articles:

  • China Notes, July ’23: On Technological Momentum — China's political environment poses a threat to its technological momentum, with Chinese undergraduates in the US reporting that their parents urge them not to return to the mainland. China retains strengths independent of slowing growth and demographic drags, chiefly an entrenched workforce that continues to advance manufacturing complexity.
  • Rich Chinese Eye Australia Homes as 700,000 to Leave by 2025 — A real estate firm estimates about 712,000 people will migrate from China to the US, Canada, and Australia over a three-year period, a sustained exodus likely to keep driving Chinese property purchases abroad. Capital flight from mainland China could reach $150bn in a year as people move money offshore.
  • 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.

AI Summary. China's headline goods trade surplus is about 5% of its GDP, with the underlying surplus in manufactured goods close to 10% of GDP. The author argues that if China relies on interest rate cuts, exchange rate liberalization, and a weak yuan to offset its property downturn, its trade surplus could reach record levels relative to trading partners' output.

Brad Setser Council on Foreign Relations
Date Posted:

Noting China’s trade surplus is already very large, @Brad_Setser worries that Chinese policymakers will seek to offset the property slump by doubling down on external balances.

Can China offset its property downturn without enlarging its trade surplus?

Core argument: China's headline goods trade surplus stands at about 5% of GDP, while the underlying surplus in manufactures is close to 10% of GDP.

China’s trade surplus is already very large. The headline goods surplus is about 5% of China's GDP, and the underlying surplus in manufacturers is close to 10% of GDP. I certainly worry that if China relied entirely on interest rate cuts, exchange rate liberalization, and a weak yuan to offset the property slump, China's external trade surplus could increase to record levels relative to the GDP of its trade partners. China, far more than other large economies, relied on net exports to sustain its economy during the pandemic. It would be placing a significant further burden on its trading partners if it ends up relying on an even bigger manufacturing surplus to offset the slack created by its property downturn over the next few years.

Takeaways by Macro Roundup® AI

  1. China's headline goods trade surplus stands at about 5% of GDP, while the underlying surplus in manufactures is close to 10% of GDP.
  2. If China offsets its property slump entirely through interest rate cuts, exchange rate liberalization, and a weak yuan, its external trade surplus could rise to record levels relative to trading partners' GDP.
  3. China relied on net exports to sustain its economy during the pandemic far more than other large economies, and relying on an even bigger manufacturing surplus to offset property-driven slack would place a significant further burden on its trading partners.

Related Articles:

  • Can China’s Long-Term Growth Rate Exceed 2–3 Percent? — China invests roughly 42–44% of its GDP, while more mature, capital-intensive economies typically invest about 15–20%. Modeling a ten-year path that lowers China's investment share to 30% of GDP, the author argues the resulting growth rate depends mainly on how fast consumption grows.
  • How China Can Avoid the Japan Trap — China's high savings, concentrated among controllers of capital, now exceed what can be productively invested, so income needs to shift toward those who will spend it. The risk is chronically weak demand rather than a financial crisis, since China is a creditor country whose debts are in its own currency.
  • The Neoclassical Growth of China — China's per capita GDP growth path closely tracks those of Japan, South Korea, and Taiwan from similar starting income levels, indicating nothing unusual about its growth rate. The authors' model projects China's per capita GDP will level off at about 41% of the US level, reflecting a slowdown in productivity catch-up.

Tuesday, October 10, 2023

AI Summary. Ivy League athletes are far more likely than non-athlete classmates to enter business and finance jobs, and the authors estimate they attain higher terminal wages, greater cumulative career earnings, and more senior positions, controlling for school, graduation year, major, and first job. The authors argue this suggests non-academic human capital developed through athletics is valued in the labor market.

Natee Amornsiripanitch, Paul Gompers, George Hu, et al. National Bureau of Economic Research
Date Posted:
Is Database:
Database

Among 400,000 people who graduated from Ivy League schools between 1970 and 2021, athletes earned 3.4% more than non-athletes over the course of their careers. @NateeA1

Do college athletes out-earn their non-athlete classmates?

Core argument: Ivy League athletes attain higher terminal wages and earn cumulatively more over their careers than non-athlete classmates, controlling for school, graduation year, major, and first job.

Combining team-level information on all Ivy League athletes from 1970 to 2021 with resume data for all Ivy League graduates, we examine both post-graduate education and career choices as well as career outcomes. Athletes are far more likely to go into business and finance-related jobs than their non-athlete classmates. Athletes attain higher terminal wages and earn cumulatively more than non-athletes over the course of their careers controlling for school, graduation year, major, and first job. In addition, they attain more senior positions in the organizations they join. Collectively, our results suggest that non-academic human capital developed through athletic participation is valued in the labor market and may support the role that prior athletic achievement plays in admissions at elite colleges.

Takeaways by Macro Roundup® AI

  1. Ivy League athletes attain higher terminal wages and earn cumulatively more over their careers than non-athlete classmates, controlling for school, graduation year, major, and first job.
  2. Ivy League athletes are far more likely than their non-athlete classmates to enter business and finance-related jobs, and they reach more senior positions in the organizations they join.
  3. The authors suggest that non-academic human capital developed through athletic participation is valued in the labor market and may support the role of prior athletic achievement in elite college admissions.

Related Articles:

AI Summary. Selection plausibly accounts for most or all of the widening mortality gap between US adults with and without a bachelor's degree: high school achievement measures have not risen since the early 1970s while the share earning degrees rose, and national youth survey data show non-graduates increasingly negatively selected on aptitude scores.

Caroline Hoxby Brookings Papers On Economic Activity
Date Posted:
Is Database:
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Caroline Hoxby argues that Anne Case and Angus Deaton’s recent findings on the divergence btw Americans with a BA and those without is largely driven by a compositional shift that has occurred as more Americans have graduated college.

Does selection explain the widening mortality gap by education?

Core argument: Selection is plausibly responsible for most or even all of the widening mortality gap between American adults with and without a BA, according to this commentary on Anne Case and Angus Deaton's work.

I find it entirely plausible that selection accounts for most or even all of the widening mortality gap. Measures of achievement have not risen among 12 graders and other high school students for essentially the entire period since we started to measure them in a consistent way (i.e. since the early 1970s). However, the share who obtain a BA degree has increased quite dramatically over the same period. An NLSY [National Longitudinal Survey Youth] exercise shows that non-BAs are increasingly negatively selected. A comparison between the NLSY79 (1979) and the NLSY97 (1997) shows that the distribution of ASVAB [Armed Services Vocational Aptitude Battery] percentiles of non-BAs is shifted to the left for 97 vis-a-vis 79.

Takeaways by Macro Roundup® AI

  1. Selection is plausibly responsible for most or even all of the widening mortality gap between American adults with and without a BA, according to this commentary on Anne Case and Angus Deaton's work.
  2. Comparing the National Longitudinal Survey of Youth cohorts of 1979 and 1997, the distribution of ASVAB percentiles among adults without a BA is shifted leftward for 1997, suggesting non-BAs are increasingly negatively selected.
  3. Measures of achievement among 12th graders and other high school students have not risen since consistent measurement began in the early 1970s, while the share obtaining a BA degree rose dramatically over the same period.

Related Articles:

  • Accounting for the Widening Mortality Gap Between American Adults With and Without a BA — The mortality gap between American adults with and without a four-year college degree widened across three periods—falling mortality for both with larger gains for graduates, then diverging, then rising faster for the less educated during the pandemic—reaching an 8.5-year difference in adult life expectancy. Americans with a degree, treated as a separate country, would rank just below Japan.
  • Why Are Americans Dying So Young? — One in 25 American five-year-olds is projected not to reach age 40, making deaths among the young a defining feature of US mortality. These deaths are overwhelmingly caused by external factors such as drug overdoses, gun violence, and dangerous driving.
  • 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. A survey by American Compass concludes that only 40% of American workers have secure jobs, a finding critics dispute on methodological grounds. On one of the survey's own criteria, 96% of workers reported either a regular weekly schedule or satisfaction with their control over a varying one.

Scott Winship American Enterprise Institute
Date Posted:
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Database

.@swinshi notes a recent American Compass survey finds 96% of American workers are working full time or working the number of hours they prefer. This suggests a labor market that is effectively matching workers to their preferences.

.@swinshi notes a recent American Compass survey finds 96% of American workers are working full time or working the number...

Does survey evidence support the claim that most American jobs are insecure?

Core argument: American Compass's survey finds that only 40% of American workers have secure jobs, a result the article characterizes as the group's latest attempt to portray the U.S. economy as needing "rebuilding.".

American Compass has a new survey out in which it finds, among other results, that “only 40% of workers have secure jobs.” This is the latest attempt by the outfit to portray the American economy as in dire need of “rebuilding.” One criterion for assessing whether a worker has a secure job is their indicating either that “I have a regular work schedule that is generally the same from week to week” or that “My work schedule varies from week to week, but I am satisfied with my control over it.” American Compass does not provide the alternative responses workers could give, but 96% of them gave one of these two answers. It is striking that nearly all workers (at least those working 20 or more hours a week) either have a stable work schedule or are OK with their varying schedules.

Takeaways by Macro Roundup® AI

  1. American Compass's survey finds that only 40% of American workers have secure jobs, a result the article characterizes as the group's latest attempt to portray the U.S. economy as needing "rebuilding.".
  2. On the survey's work-schedule criterion, 96% of workers said either that their schedule is generally the same week to week or that it varies but they are satisfied with their control over it.
  3. American Compass does not provide the alternative schedule responses workers could give, and the survey covers those working 20 or more hours a week.

Related Articles:

  • The Cost of Thriving Has Fallen: Correcting and Rejecting the American Compass Cost of Thriving Index — The authors recalculate the Cost of Thriving Index and estimate the cost of supporting a family on one male earner's wages rose by just over 10 weeks of work rather than 22 weeks. Accounting for federal taxes—including the child tax credit—and quality improvements in health care and cars, they estimate the cost is now lower than in 1985.
  • Upward Mobility Is Alive and Well in America — Comparing children's adult incomes with the inflation-adjusted income quintiles of their childhood rather than contemporaneous quintiles produces much higher measured upward mobility: only 28% of children raised in the bottom quintile remained below that childhood threshold as adults, while 26% reached the top childhood quintile, which required $111,416 (2016 dollars) for a family of four.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.

Jagadeesh Gokhale and Kent Smetters University of Pennsylvania
Date Posted:
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Database

A @BudgetModel analysis argues the United States has two decades to undertake structural reforms to keep debt below 200% of GDP, a level which will be associated with a government default.

How much federal debt can the United States sustain?

Core argument: The authors estimate that U.S. debt held by the public cannot exceed about 200% of GDP even under today's generally favorable market conditions, beyond which no future tax increases or spending cuts could avoid explicit default or debt monetization producing significant inflation.

We estimate that the U.S. debt held by the public cannot exceed about 200% of GDP even under today’s generally favorable market conditions. Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Table 1 then shows the impact on the debt-GDP ratio if financial markets start to demand a larger return before unraveling. However, additional rates closer to 50 to 100 b.p. are more reasonable in the short run, as some borrowing rates are already locked in at a weighted average duration of about 6 years. Table 1 shows that between 2040 and 2045---or in about 20 years---the U.S. debt-GDP ratio will hit between 175 and 200 percent under current fiscal policy, depending on the assumed interest rates.

Takeaways by Macro Roundup® AI

  1. The authors estimate that U.S. debt held by the public cannot exceed about 200% of GDP even under today's generally favorable market conditions, beyond which no future tax increases or spending cuts could avoid explicit default or debt monetization producing significant inflation.
  2. Under current fiscal policy, the authors project the U.S. debt-GDP ratio will reach 175–200% between 2040 and 2045, depending on assumed interest rates, leaving about 20 years for corrective action.
  3. The authors judge additional borrowing rates closer to 50–100 basis points more reasonable in the short run, since some borrowing rates are already locked in at a weighted average duration of about 6 years.

Related Articles:

  • Interest Expense: A Bigger Impact on Deficits than Debt — The US is running a primary deficit—excluding interest costs—much larger than its historical norm, at a point in the business cycle when deficits would normally be smaller than usual. The average interest rate on federal debt is projected to remain at or below the rate of nominal GDP growth over the next decade.
  • The High Cost of Borrowing at Low Rates — The authors estimate that nearly 60% of US debt originated when the average ten-year Treasury rate was below 3%, and 75% when three-month Treasuries paid below 3%. That debt is now being rolled over into Treasuries paying 4.5%–5.6%, a rollover risk the authors argue policymakers failed to account for.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.

AI Summary. U.S. crude oil exports reached a record high of 3.99m barrels per day, up 650,000 b/d (19%) from a year earlier, yet the U.S. remains a net crude oil importer. Many U.S. refineries are configured to process heavy, sour crude rather than the light, sweet crude typically produced domestically.

Kevin Hack Energy Information Administration
Date Posted:

US crude exports hit a record high of 3.99mm barrels per day in the first half of 2023. @EIAgov

Why does the U.S. import crude oil while exporting record amounts?

Core argument: U.S. crude oil exports averaged 3.99 million b/d in the first half of 2023, a record for the first half of a year since the United States repealed its ban on most crude oil exports in 2015.

U.S. crude oil exports in the first half of 2023 averaged 3.99 million barrels per day (b/d), which is a record high for the first half of a year since 2015, when the U.S. ban on most crude oil exports from the United States was repealed. In the first half of 2023, crude oil exports were up 650,000 b/d (19%) compared with the first half of 2022. Although exports increased in the first half of 2023, the United States still imports more crude oil than it exports, meaning it remains a net crude oil importer. The United States continues to import crude oil despite rising domestic crude oil production in part because many U.S. refineries are configured to process heavy, sour crude oil rather than the light, sweet crude oil typically produced in the United States.

Takeaways by Macro Roundup® AI

  1. U.S. crude oil exports averaged 3.99 million b/d in the first half of 2023, a record for the first half of a year since the United States repealed its ban on most crude oil exports in 2015.
  2. U.S. crude oil exports rose 650,000 b/d, or 19%, in the first half of 2023 compared with the first half of 2022, though the United States remains a net crude oil importer.
  3. The United States continues to import crude oil despite rising domestic production in part because many U.S. refineries are configured to process heavy, sour crude rather than the light, sweet crude typically produced domestically.

Related Articles:

  • U.S. Petroleum Product Exports Set New Record In the First Half of 2023 — U.S. petroleum product exports reached nearly 6.0m barrels per day in the first half of the year, 2% above the same period a year earlier and the highest first-half total in records dating to 1981. The rise over the 2000s and 2010s reflects factors including greater competitiveness and efficiency at U.S. Gulf Coast refineries and increasing hydrocarbon gas liquids production.
  • Portfolio Nuclear — The US is in its fifth year of net energy independence, with domestic oil and gas production at all-time highs across four consecutive administrations. Wind and solar now supply 15% of the grid, allowing more coal and liquefied natural gas to be exported.
  • The Changing Nexus Between Commodity Prices and the Dollar: Causes and Implications — The shale boom turned the United States into a net exporter of natural gas and of oil, altering how commodity prices relate to US trade. Where higher oil prices were historically associated with a deterioration in US terms of trade, they now correspond to an improvement.

AI Summary. Black Americans previously had a lower per-capita traffic fatality rate than White Americans, largely because they drive less, but their rate is now 26% higher after peaking at 37% higher. Survey data show 9% of Americans 16 and older were involved in a traffic stop as a driver or passenger, down from 11%.

Justin Fox Bloomberg
Date Posted:
Is Database:
Database

46,020 Americans were killed in traffic accidents in the US in 2022, up 18% from pre-pandemic levels. This was driven primarily by rising Black per-capita fatality rates, which were 26% higher than for whites last year. @foxjust

Do fewer traffic stops raise traffic fatalities among Black Americans?

Core argument: Black Americans' per-capita traffic fatality rate was 37% higher than White Americans' by 2021 and 26% higher last year, reversing a pre-2014 pattern in which Black Americans faced lower risk, mainly because they drive much less.

Before 2014, which is when concerns about police bias began to take center stage after a police killing in the St. Louis suburb of Ferguson, Missouri, Black Americans were at lower risk of dying in a traffic accident than White Americans (mainly because they drive much less). By 2021, Black Americans’ per-capita fatality rate was 37% higher; last year it was 26% higher. National data on traffic stops is limited, with the Bureau of Justice Statistics’ most recent Police-Public Contact Survey, conducted in 2020, finding that 9% of Americans 16 and older were involved in a traffic stop as a driver or passenger that year, down from 10.3% in 2018 and 11% in 2015.

Takeaways by Macro Roundup® AI

  1. Black Americans' per-capita traffic fatality rate was 37% higher than White Americans' by 2021 and 26% higher last year, reversing a pre-2014 pattern in which Black Americans faced lower risk, mainly because they drive much less.
  2. The Bureau of Justice Statistics' Police-Public Contact Survey found 9% of Americans 16 and older were in a traffic stop as a driver or passenger in 2020, down from 10.3% in 2018 and 11% in 2015.
  3. National data on traffic stops is limited, with the most recent Police-Public Contact Survey conducted in 2020, while concerns about police bias took center stage after the 2014 police killing in Ferguson, Missouri.

Related Articles:

  • The Pandemic Drinking Binge Just Keeps Going — Alcohol-induced deaths in the US rose from 39,043 in 2019 to 54,258 in 2021, according to the Centers for Disease Control and Prevention, with the population-adjusted death rate more than double its level in the 2000s. Even so, US alcohol consumption likely remains below that of many affluent countries, particularly in Europe.
  • 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.
  • Who Won the Cold War? Part III — 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.