Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “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 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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, October 27, 2023

AI Summary. Real median US household net worth rose 37% over a recent three-year period, surpassing pre-2008-recession levels, while wealth inequality, though still very high, fell to among its lowest levels in a decade. Housing drove the gains: the median homeowner's real net worth rose about $101k, $63k of it from home price appreciation, versus roughly $3.1k for the median renter.

Joseph Politano Apricitas Economics
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Driven by housing appreciation, real median family net worth hit a record high in 2022. @JosephPolitano

Has rising home prices driven record median household wealth gains?

Core argument: Real median US net worth rose 37% over the last three years, leaving middle-class Americans richer than ever and finally recovering from the 2008 recession.

Middle-class Americans are richer than ever before, with real median US net worth rising a staggering 37% over the last three years and finally recovering from the 2008 recession. Wealth inequality, while still extremely high, fell to some of the lowest levels in the last decade. It is actually hard to oversell just how central the housing market has been to rising middle-class wealth—the median renter saw their real net worth increase by about $3.1k since 2019 while the median homeowner saw their real net worth increase by $101k, of which $63k came directly from home price appreciation.

Takeaways by Macro Roundup® AI

  1. Real median US net worth rose 37% over the last three years, leaving middle-class Americans richer than ever and finally recovering from the 2008 recession.
  2. The median homeowner's real net worth rose about $101k since 2019, of which $63k came from home price appreciation, while the median renter gained about $3.1k.
  3. Wealth inequality, while still extremely high, fell to some of the lowest levels of the last decade.

Related Articles:

  • Median Income Is Down Again. Are There Any Silver Linings in the Data? — Inflation-adjusted Census income data show the share of Black families with incomes under $35,000 fell from half in 1967 to about a quarter, while the share earning over $100,000 rose from 5% to over 30%. The middle group, $35,000 to $100,000, has remained in the mid-40% range.
  • Unlike Others, the Top Earners See Strong Pay Growth Beyond Age 35 — At age 25, workers in the top lifetime-earnings bracket average about $39,000 versus roughly $12,000 for the bottom bracket, a gap of about 3.25x. Top earners' pay rises 435% between ages 25 and 35 and over 150% between 35 and 45, exceeding $500,000 annually by age 45, while bottom earners gain about 15-16% per decade.
  • Income Ladder Is Difficult to Climb for US Metro Areas — Only three of the 15 most affluent US metro areas in 1949 remain in the top 15, while several former leaders now rank among the least affluent, indicating more persistence at the bottom than the top. Regional incomes converged from 1929 into the 1970s, then stopped, leaving the Southeast and Southwest poorest.

AI Summary. The Bureau of Labor Statistics reports year-on-year wage growth for union members reached 4.6%, catching up with the larger pay rises non-union workers had been receiving. Analysis of 425 newly ratified union contracts by Bloomberg Law found first-year pay increases of 7% and 6.1%, against a 3% average over the preceding 10 years.

Eva Xiao and Taylor Nicole Rogers Financial Times
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Recent labor activity has resulted in unionized private-sector wage gains outpacing non-union workers, reversing a post-pandemic trend where non-union labor had seen larger wage gains.

Are union wage gains catching up with non-union pay increases?

Core argument: Union members' wages rose 4.6% year-on-year in the second quarter, according to the Bureau of Labor Statistics, catching up with the faster pay increases non-union workers had enjoyed since 2021.

Year-on-year wage growth for union members reached 4.6% in the second quarter, according to the Bureau of Labor Statistics, catching up with higher pay rises that non-union workers had enjoyed since 2021. For union contracts ratified in the first two quarters of this year, first-year pay increases were especially strong at 7 and 6.1%, respectively, according to Bloomberg Law. The average increase over the preceding 10 years was 3%, records compiled by the legal research platform showed. The data, based on wage information from 425 contracts analysed by Bloomberg Law, provide an incomplete picture as companies are not required to make their agreements public. But they offer a snapshot of how workers have been able to command higher wages in the US’s post-pandemic economy.

Takeaways by Macro Roundup® AI

  1. Union members' wages rose 4.6% year-on-year in the second quarter, according to the Bureau of Labor Statistics, catching up with the faster pay increases non-union workers had enjoyed since 2021.
  2. First-year pay increases in union contracts ratified in the first two quarters of this year reached 7% and 6.1%, according to Bloomberg Law, against an average of 3% over the preceding 10 years.
  3. Bloomberg Law's figures draw on wage information from 425 contracts and give an incomplete picture, as companies are not required to make their agreements public.

Related Articles:

  • American Air Pilots Approve Record Contract With Higher Pay — American Airlines pilots approved a four-year contract providing 46% in cumulative pay raises and retirement contributions plus bonuses and improved scheduling, sick leave, and insurance benefits. The Allied Pilots Association says it will add about $9.6bn in incremental costs, making it the most expensive labor contract for a US carrier, above the $7.2bn Delta Air Lines pilot accord.
  • Ford Agrees to 25% Wage Hike in Tentative Deal to End UAW Strike — The United Auto Workers reached a tentative agreement with Ford in which the carmaker agreed to a 25% hourly wage increase over a contract lasting more than four years. Including cost-of-living allowances, the union says the top wage rate is expected to rise 33% to over $40 an hour.
  • The ‘Summer of Strikes’ Isn’t Living Up to the Hype — Recent strike waves differ in composition: earlier ones were dominated by teachers and other state and local government workers, while current strikers are mostly private-sector employees, often organizing location-by-location in stoppages too small to appear in Bureau of Labor Statistics counts. The Cornell-ILR Labor Action Tracker recorded 224,000 workers in stoppages versus the Bureau's 120,600.

AI Summary. Bank of America internal data show average monthly household childcare payments have risen steadily over three years to more than $700, 32% above the 2019 average, with prices potentially rising further after a federal program subsidizing childcare providers expired. Over 12% of US households pay for childcare regularly, according to the Department of Health & Human Services.

Anna Zhou and Jonathan Kaplan Bank of America
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According to @BankofAmerica microtransaction data, the mean childcare payment per household has risen over 30% since 2019. Middle and upper-middle-income households ($100-$250k) have been most impacted.

How much are household childcare costs rising?

Core argument: Bank of America internal data show the average family spent over $700 per month on childcare as of September, 32% above the 2019 average, with monthly payments per household rising steadily over the past three years.

According to Bank of America internal data, average monthly childcare payments per household have increased steadily over the past three years. As of September, an average family spent over $700 per month, 32% higher than the 2019 average. Moreover, prices could rise further as the Child Care Stabilization program, which subsidized childcare providers and was part of the American Rescue Plan in 2021, expired on September 30. This could have a meaningful impact on consumers because over 12% of US households pay for childcare on a regular basis, according to the Department of Health & Human Services, and any further increase in prices would disproportionally weigh on families with young children. According to a recent survey by Care.com, for parents that pay for childcare, 67% are already spending 20% or more of their annual household income on such services.

Takeaways by Macro Roundup® AI

  1. Bank of America internal data show the average family spent over $700 per month on childcare as of September, 32% above the 2019 average, with monthly payments per household rising steadily over the past three years.
  2. The Child Care Stabilization program, which subsidized childcare providers under the 2021 American Rescue Plan, expired on September 30, and childcare prices could rise further as a result.
  3. Over 12% of US households pay for childcare regularly, according to the Department of Health & Human Services, and 67% of parents paying for childcare already spend 20% or more of annual household income on it, per a Care.com survey.

Related Articles:

  • How Child Care Impacts Parents’ Labor Force Participation — The number of U.S. child care workers was about 6% below pre-pandemic levels while child care costs were up 14%, and the share of parents of young children citing child care as the main reason for low work hours rose from about 15% to 18%. Even so, labor force participation among partnered women with young children surpassed its pre-pandemic level.
  • Understanding The Missing Millions — A combined 7% of US survey respondents who were not working cited caregiving as the reason — 5% caring for children and 2% for elderly relatives. Daycare and preschool costs have risen more than 10% since the start of the pandemic, and Bank of America internal data show 7% fewer customers making childcare payments than at the start of 2020.
  • Why Americans Are Having Fewer Babies — Sociologists find that US women born in the late 1980s had, on average, about one child fewer by their early 30s than they had intended, roughly double the shortfall for women born two decades earlier. The median age at which women give birth is 30, three years older than in 1990.

AI Summary. Private credit emerged as an alternative to banks as regulators tightened rules on risky lending by deposit-taking institutions, and now competes with mainstream lenders across businesses from real estate firms to tech startups. Closed-end private debt funds held roughly $1.6tn in assets globally, up from about $500bn at the end of 2015.

Katharine Hidalgo Bloomberg
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Assets in closed-end private debt funds have risen from $0.5 trillion at the end of 2015 to $1.6 trillion in March of 2023.

How has private credit grown into a rival to banks?

Core argument: Preqin reported that closed-end private debt funds across five lending strategies held roughly $1.6 trillion of assets under management globally as of March 2023, up from about $500 billion at the end of 2015.

Private credit came of age after the 2008 financial crisis as an alternative to banks at a time when regulators were clamping down on risky lending by deposit-taking institutions. Today it’s become a serious rival to mainstream lending for all kinds of businesses, from real estate firms to tech startups. Data company Preqin said closed-end private debt funds using the five lending strategies [Direct lending, Distressed debt, Venture debt, Mezzanine finance, and Special situations] had around $1.6 trillion of assets under management globally as of March 2023, up from around $500 billion at the end of 2015.

Takeaways by Macro Roundup® AI

  1. Preqin reported that closed-end private debt funds across five lending strategies held roughly $1.6 trillion of assets under management globally as of March 2023, up from about $500 billion at the end of 2015.
  2. Private credit emerged as an alternative to banks after the 2008 financial crisis, when regulators were clamping down on risky lending by deposit-taking institutions.
  3. Private credit has become a serious rival to mainstream lending for businesses ranging from real estate firms to tech startups, spanning direct lending, distressed debt, venture debt, mezzanine finance, and special situations.

Related Articles:

  • Where Are All the Defaults? — One explanation for subdued high-yield bond spreads is that the lowest-quality borrowers, those most likely to default, have migrated from high-yield markets into private credit. Moody's reports the number of issuers with its lowest speculative-grade ratings has fallen, and that 62% of its rated universe is rated single-B or below.
  • Higher Cost of Capital Continues — Higher costs of capital following Federal Reserve rate increases have pushed more companies into bankruptcy, as some firms cannot obtain new loans or refinance existing debt. The author argues this rise in bankruptcies will continue as long as interest rates stay high, which is the intended mechanism for slowing the economy to return inflation to 2%.
  • Credit Normalization — Excluding Treasury securities, more than $30tn of debt securities are outstanding, and credit spreads, while wider than their 2021 lows, remain within historical ranges. The recent slight deterioration in credit-quality metrics and the rise in bankruptcy filings from historically low levels most likely reflect normalization rather than emerging financial distress.

AI Summary. European Union output per hour worked has risen from about 72% of the US level in the early 2000s to about 82%. The EU's 28% shortfall in GDP per capita versus the US is roughly two-thirds attributable to lower output per hour and one-third to fewer hours worked; Germany's shortfall reflects fewer hours alone.

Tim Taylor Conversable Economist
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Overall GDP per hour worked in Europe is about 82% of US levels. German productivity per hour worked is on par with the US, and lower per capita GDP is “entirely due to fewer hours worked” according to @TimothyTTaylor.

How much of the EU's income gap with America reflects productivity?

Core argument: EU GDP per hour worked has risen from about 72% of the US level in the early 2000s to about 82%.

For the EU as a whole, GDP per hour worked has risen from about 72% of US levels back in the early 2000s to about 82% of US levels (blue dashed line). For Germany, with its very low level of average hours worked, GDP per hour worked was roughly equal to the US level back in the mid-1990s, then dropped off, and has now caught up again. For the EU as a whole, the lower per capita GDP–28% below the US level–is roughly two-thirds due to the fact that GDP per hour worked is below US levels, and one-third due to fewer hours worked. But for Germany (and for some other western and northern EU economies), the lower per capita GDP compared to the US level is entirely due to fewer hours worked.

Takeaways by Macro Roundup® AI

  1. EU GDP per hour worked has risen from about 72% of the US level in the early 2000s to about 82%.
  2. EU per capita GDP sits 28% below the US level, roughly two-thirds of which stems from lower GDP per hour worked and one-third from fewer hours worked.
  3. Germany's GDP per hour worked roughly matched the US level in the mid-1990s, then dropped off and has since caught up again, leaving its lower per capita GDP entirely attributable to fewer hours worked.

Related Articles:

  • The Slowdown in Europe via Human Capital — Europe's slowdown in GDP per capita growth reflects weaker productivity growth and aging, partly offset by rising labor force participation and hours worked. Gross changes in these growth components between 1979–1999 and 1999–2019 were large but largely offsetting, leaving a net decline of roughly 1 percentage point for most of Europe.
  • Productivity Has Grown Faster in Western Europe than in America — Adjusted for purchasing power, the EU's GDP is roughly 95% of America's, the same share as a decade earlier, while at market exchange rates US prices went from 5.4% above EU levels to 46% higher, largely because of a strong dollar. GDP per person has still grown faster in America than in most of Western Europe.
  • Europe Has Fallen Behind America and the Gap is Growing — The EU economy was somewhat larger than the US in 2008 ($16.2tn versus $14.7tn), but by 2022 the US had grown to $25tn while the EU and UK combined reached only $19.8tn. The dollar's status as the world's reserve currency allows the US to finance its ambitions without unsettling markets.

Monday, October 30, 2023

AI Summary. British graduates' median hourly pay of £21 (just over $26) trails the almost $36 earned by US graduates, a 27% gap that has widened from 8% roughly 15 years earlier, while non-graduates in both countries earn similar amounts. Across most of Britain, more than a third of graduates work in jobs that do not require a degree.

John Burn-Murdoch Financial Times
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US college graduates earn 40% more than their British counterparts despite comparable skill levels. @jburnmurdoch argues that this is driven by “much higher and more lucrative demand” for talent in the US economy relative to the UK.

Why do British graduates earn far less than American graduates?

Core argument: British graduates earned median hourly pay of £21 (just over $26) last year versus almost $36 for US graduates, a 27% gap that has widened from 8% on the eve of the global financial crisis 15 years ago.

Britons who left the education system at 18 without a degree were paid an average of £14 an hour in 2022 (about $18 after adjusting for price differences). Their US counterparts earned only marginally more, at $19 an hour. Last year [British graduates’] median hourly earnings were £21, or just over $26. US graduates pocketed almost $36 an hour. On the eve of the global financial crisis 15 years ago, British graduates made just 8% less than US grads; that gap has ballooned to 27%. Across most of Britain, more than a third of graduates are working in jobs that do not require a degree — even in London, the figure is 25%. America has mountains of highly lucrative and skilled jobs chasing the best candidates, while Britain has mountains of skilled candidates chasing a small number of world-class graduate employment opportunities.

Takeaways by Macro Roundup® AI

  1. British graduates earned median hourly pay of £21 (just over $26) last year versus almost $36 for US graduates, a 27% gap that has widened from 8% on the eve of the global financial crisis 15 years ago.
  2. Britons who left education at 18 without a degree were paid an average £14 an hour in 2022, about $18 after adjusting for price differences, only marginally below the $19 earned by their US counterparts.
  3. More than a third of graduates across most of Britain work in jobs that do not require a degree, a figure that stands at 25% even in London.

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.
  • Falling College Wage Premiums by Race and Ethnicity — The college wage premium is largest for Asian workers, whose college graduates earn more than twice what high school graduates earn — about a 120% premium versus roughly 70–80% for Black, Hispanic, and White workers. The premium has edged down slightly for all groups except Hispanic workers since the pandemic recession.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. Declining balances in the Federal Reserve's reverse repurchase facility are projected to eventually outweigh the Fed's balance-sheet runoff and produce a net increase of money in the financial system. As money market funds lend to the Treasury, that cash flows through government spending into the banking system, mechanically increasing bank reserves and deposits.

Joseph Wang Fed Guy Blog
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.@FedGuy12 notes that the rising level of reserve and Treasury General Account balances will ease financial conditions over the next several months.

Can falling reverse repo balances offset the Fed's balance-sheet runoff?

Core argument: The Federal Reserve's quantitative tightening program is draining bank reserves at roughly $240bn a quarter, while declining reverse repo balances push in the opposite direction, with the interaction producing a modest increase in bank reserves.

Declining RRP [reverse repo] balances will eventually overwhelm QT and lead to a net increase of money in the financial system. After [money market funds] lend money to the Treasury, the money moves from the RRP to the Treasury General Account [TGA] and then into the banking system through fiscal spending. In our two-tiered monetary system, this mechanically increases reserves (money for banks) and deposits (money for non-banks) in a manner similar to QE. However, the Fed’s QT program has also been pushing in the opposite direction and draining reserves at a rate of around $240b a quarter. The interaction between the two forces has resulted in a modest increase in bank reserves.

Takeaways by Macro Roundup® AI

  1. The Federal Reserve's quantitative tightening program is draining bank reserves at roughly $240bn a quarter, while declining reverse repo balances push in the opposite direction, with the interaction producing a modest increase in bank reserves.
  2. When money market funds lend to the Treasury, funds move from the reverse repo facility to the Treasury General Account and then into the banking system via fiscal spending, mechanically raising both reserves and deposits in a manner similar to quantitative easing.
  3. Declining reverse repo balances will eventually overwhelm quantitative tightening and produce a net increase of money in the financial system.

Related Articles:

  • A Beautiful Replenishment — Money market funds buying Treasury bills lets bank reserves be replenished as cash moves from the Federal Reserve's overnight reverse repo facility into the Treasury's account and back out through government spending. The author argues reserves should stay abundant, allowing the Federal Reserve's balance sheet runoff to continue about two more years.
  • Probing LCLoR — Bank reserves stand around $3.2t versus a common Federal Reserve estimate of roughly $2.2t (8% of GDP) for the lowest comfortable level, and reserves are on track to approach that level within months. Growth in reverse repo balances and rebuilding of the Treasury's cash account would draw reserves down.

AI Summary. Post-pandemic excess savings and core consumer price inflation one year later track each other closely, with inflation rising, peaking, and declining roughly a year after excess savings did. The author argues fiscal stimulus that boosted disposable income and excess savings contributed to this inflation episode, alongside monetary policy and supply chain problems.

Jesper Rangvid Rangvid's Blog
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Jesper Rangvid notes that inflation has broadly tracked excess savings in the US with a one-year lag and suggests “fiscal stimulus has been an important driver of inflation, at least in the US.”

Does excess household savings track inflation a year later?

Core argument: Core CPI inflation has tracked accumulated excess savings, measured against the 2016–2019 trend, with a one-year lag: excess savings rose in 2020 and inflation rose a year later.

Inflation and excess savings have followed remarkably similar trends after the pandemic. Figure 6 shows excess savings (based on the 2016-2019 trend) and core CPI inflation one year later (note that inflation refers to the 2nd y-axis and the upper x-axis). The correlation is striking. Core inflation follows accumulated excess savings with a lag of one year. One year after excess savings started rising in 2020, inflation rose. Excess savings peaked in autumn 2021, as mentioned, and inflation peaked a year later. Since then, excess savings have declined and so has inflation with a one-year lag. It is tempting to conclude that excess savings caused this inflation episode. As you may recall, I agree that fiscal stimulus (which increased people’s disposable income and thus caused the accumulation of excess savings) contributed to this inflation episode, although I also believe that monetary policy and supply chain challenges played a role.

Takeaways by Macro Roundup® AI

  1. Core CPI inflation has tracked accumulated excess savings, measured against the 2016–2019 trend, with a one-year lag: excess savings rose in 2020 and inflation rose a year later.
  2. Excess savings peaked in autumn 2021 and core inflation peaked a year later, with both declining since then on the same one-year lag.
  3. The author argues fiscal stimulus raised disposable income and drove the accumulation of excess savings, contributing to the inflation episode alongside monetary policy and supply chain challenges.

Related Articles:

  • Accumulated Savings During the Pandemic: An International Comparison with Historical Perspective — The authors construct measures of excess household savings accumulated during the COVID-19 pandemic and find they have been unwound in the United States, declined in advanced foreign economies, and slowed in emerging market economies. Past recessions featured smaller increases in excess savings and greater persistence in the accumulated stock.
  • 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.
  • Spending Down Pandemic Savings Is an “Only-in-the-U.S.” Phenomenon — Household saving rose in the United States and other high-income economies during the COVID-19 pandemic, but only in the U.S. and Canada did income-support measures push incomes well above pre-pandemic trajectories, while consumption fell everywhere. The divergence between U.S. and foreign saving behavior has no clear explanation.

AI Summary. Foreign direct investment into China is falling across multiple measures, with one month showing a 34% year-on-year drop to Rmb72.8bn ($10bn), the steepest decline since monthly figures became available in 2014. After rising 15% year on year early in the year, inflows have posted double-digit percentage declines each month since.

Thomas Hale, Ryan McMorrow, and Andy Lin Financial Times
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.@Brad_Setser notes that FDI into China is at a two-decade low, as “foreign companies are no longer reinvesting back in China…they are getting [their] profits out of the country as fast as they can.”

Is foreign direct investment into China declining sharply?

Core argument: Foreign direct investment into China fell 34% year on year to Rmb72.8bn ($10bn) in September, the biggest decline since monthly figures became available in 2014, according to Financial Times calculations based on Chinese commerce ministry data compiled by Wind.

Foreign direct investment into China is falling across multiple measures, adding to pressure on Beijing and local governments as they seek to counter an economic slowdown. Financial Times calculations based on Chinese commerce ministry data compiled by Wind show that FDI fell 34% to Rmb72.8bn ($10bn) year on year in September, the biggest decline since monthly figures became available in 2014. The weakness in FDI has been part of a steady march of disappointing economic readings since China lifted pandemic restrictions at the start of the year. While FDI leapt 15% in January on the previous year, it has recorded double-digit percentage declines every month since May.

Takeaways by Macro Roundup® AI

  1. Foreign direct investment into China fell 34% year on year to Rmb72.8bn ($10bn) in September, the biggest decline since monthly figures became available in 2014, according to Financial Times calculations based on Chinese commerce ministry data compiled by Wind.
  2. China's foreign direct investment rose 15% year on year in January but has posted double-digit percentage declines every month since May, part of a run of disappointing economic readings since Beijing lifted pandemic restrictions at the start of the year.
  3. Falling foreign direct investment across multiple measures adds to pressure on Beijing and local governments as they seek to counter China's economic slowdown.

Related Articles:

  • The Rise & Fall of Foreign Direct Investment in China — Net foreign direct investment into China has been negative for four consecutive quarters, as foreign investors shifted from reinvesting earnings from their Chinese operations to repatriating them. Whether this reflects cash management or signals a future slowdown in foreign direct investment is unclear, but the repatriation of profits is negative for China's currency.
  • China’s Brain Drain Threatens Its Future — United Nations data show net emigration from China has risen from a low of about 125,000 a year to more than 300,000. Private data on individuals with over $1m in assets show a similar pattern, with net outflows of the wealthy climbing from around 9,000 a year to over 15,000.
  • China’s Age Of Malaise — More than 300,000 Chinese people emigrated in a single year, more than double the pace of a decade earlier, with some traveling overland through a half-dozen countries to reach the US. US authorities at the southern border recorded 17,894 encounters with Chinese migrants over ten months, a thirteenfold increase from the prior year.

AI Summary. United Nations forecasts project Africans will rise from 8% of the world's people in 1950 to one-quarter by 2100, with the continent holding the world's largest workforce within a decade. McKinsey & Company estimates Africa's per-person economic growth has averaged 1% annually since 1990, against India's 5% and China's 9%.

Declan Walsh New York Times
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Analysis by the UN projects that by 2050, 35% of the world’s population aged 15-24 will live in Africa, up from 23% in 2023.

Is Africa becoming a larger share of the world's population?

Core argument: Africans made up 8% of the world's people in 1950 and will account for one-quarter of humanity and at least one-third of all people aged 15 to 24 a century later, according to United Nations forecasts.

In 1950, Africans made up 8% of the world’s people. A century later, they will account for one-quarter of humanity, and at least one-third of all young people aged 15 to 24, according to United Nations forecasts. The median age on the African continent is 19. In India, the world’s most populous country, it is 28. In China and the United States, it is 38. Within the next decade, Africa will have the world’s largest work force, surpassing China and India. By the 2040s, it will account for two out of every five children born on the planet. Adjusted for population size, Africa’s economy has grown by 1 percent annually since 1990, according to the global consulting firm McKinsey & Company. Over the same period, India’s grew 5% per year and China’s grew 9%.

Takeaways by Macro Roundup® AI

  1. Africans made up 8% of the world's people in 1950 and will account for one-quarter of humanity and at least one-third of all people aged 15 to 24 a century later, according to United Nations forecasts.
  2. Africa's median age is 19, compared with 28 in India and 38 in China and the United States, and Africa will have the world's largest work force within the next decade, surpassing China and India.
  3. Adjusted for population size, Africa's economy has grown 1% annually since 1990, against 5% per year in India and 9% in China, according to McKinsey & Company.

Related Articles:

  • Demography Is Destiny in Africa — Sub-Saharan Africa is projected to account for half of global population growth through 2050 and to hold a third of the world's people by the end of the century, up from 14%. Its population is growing 3x faster than the rest of the world, concentrating rapid growth in countries where nearly half have gross national income per person below $1,135.
  • Giorgia Meloni Calls For EU Help To Deal With Surge In Migrant Arrivals — Italy has appealed for greater European Union support as more than 12,000 people arrived from north Africa in a single week, most reaching the island of Lampedusa. Arrivals on Italian shores have surged to more than 128,600 so far this year, up from about 66,200 a year earlier.
  • Saudi Forces Accused of Killing Hundreds of Ethiopian Migrants — Human Rights Watch alleges in a 73-page report that Saudi border forces killed hundreds of Ethiopian migrants attempting to cross into the kingdom from Yemen, firing explosive weapons at them and in some cases asking migrants which limb they would prefer to be shot. Saudi Arabia hosts hundreds of thousands of Ethiopian workers.

AI Summary. The Federal Reserve has steadily raised its estimate of the long-run federal funds rate, which suggests it views the cost of capital as permanently higher. A permanent increase in the risk-free rate carries implications for firms, households, and asset allocation across stocks and bonds.

Torsten Sløk Apollo
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Torsten Sløk @apolloglobal argues that a steady increase in FOMC estimates of the long-run fed funds rate since early 2023 implies “the Fed is beginning to see the costs of capital as permanently higher.

Has the cost of capital shifted permanently higher?

Core argument: The Federal Reserve has steadily raised its estimate of the long-run fed funds rate since the start of 2023, which the author reads as the Fed beginning to see the costs of capital as permanently higher.

The Fed has since the beginning of 2023 steadily increased its estimate of the long-run fed funds rate. The implication for investors is that the Fed is beginning to see the costs of capital as permanently higher. A permanent increase in the risk-free rate has important implications for firms, households, and asset allocation across equities and fixed income.

Takeaways by Macro Roundup® AI

  1. The Federal Reserve has steadily raised its estimate of the long-run fed funds rate since the start of 2023, which the author reads as the Fed beginning to see the costs of capital as permanently higher.
  2. A permanent increase in the risk-free rate carries important implications for firms, households, and asset allocation across equities and fixed income, according to the author.

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AI Summary. Denmark's law requires neighborhoods where at least half of residents are of non-Western origin and that show at least two markers of low income, low education, high unemployment, or high criminal convictions to cut social housing to no more than 40% by 2030. More than 4,000 public housing units must be emptied or demolished.

Emma Bubola New York Times
Date Posted:
Is Database:
Database

Denmark is seeking to better integrate non-Danes into Danish society by demolishing social housing in neighborhoods with low income, low education, high unemployment, and high criminal convictions where at least half of the population is non-Western.

Denmark is seeking to better integrate non-Danes into Danish society by demolishing social housing in neighborhoods with low...

Is Denmark demolishing public housing to break up immigrant neighborhoods?

Core argument: Denmark's law requires neighborhoods where at least half of residents are of non-Western origin or descent, plus at least two of low income, low education, high unemployment, or high criminal-conviction rates, to cut social housing to no more than 40% by 2030.

The housing plan was announced in 2018 by a conservative government, but it only started to take a tangible form more recently. It was part of a broader package signed into law that its supporters vowed would dismantle “parallel societies” by 2030. Among its mandates is a requirement that young children in certain areas spend at least 25 hours a week in preschools where they would be taught the Danish language and “Danish values.” The law mandates that in neighborhoods where at least half of the population is of non-Western origin or descent, and where at least two of the following characteristics exist — low income, low education, high unemployment, or a high percentage of residents who have had criminal convictions — the share of social housing needs to be reduced to no more than 40% by 2030. That means more than 4,000 public housing units will need to be emptied or torn down. At least 430 already have been demolished.

Takeaways by Macro Roundup® AI

  1. Denmark's law requires neighborhoods where at least half of residents are of non-Western origin or descent, plus at least two of low income, low education, high unemployment, or high criminal-conviction rates, to cut social housing to no more than 40% by 2030.
  2. More than 4,000 public housing units in Denmark must be emptied or torn down under the plan, and at least 430 have already been demolished.
  3. The Danish package, announced in 2018 by a conservative government and signed into law with supporters vowing to dismantle "parallel societies" by 2030, also requires young children in certain areas to spend at least 25 hours a week in preschools teaching Danish language and "Danish values.".

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AI Summary. Illegal crossings at the U.S.-Mexico border exceeded 2m for a second consecutive year, historic highs, according to government data, and rose after the expiration of a policy that allowed rapid expulsion of migrants. Families, no longer subject to detention, grew from about a fifth of border apprehensions to about half.

Ashley Wu New York Times
Date Posted:

For the second year in a row, the number of illegal crossings at the U.S.-Mexico border surpassed two million.

Why do illegal border crossings remain at historic highs?

Core argument: Illegal crossings at the U.S.-Mexico border exceeded two million for the second consecutive year, historic highs, according to government data.

For the second year in a row, the number of illegal crossings at the U.S.-Mexico border surpassed two million, historic highs, according to government data released this month. Title 42, passed during the Trump Administration, had been used to quickly expel illegal migrants. The policy expired in May. Since then, the number of illegal border crossings has increased. Historically, most migrants have come from Mexico, Guatemala, Honduras, and El Salvador. More recently, migrants from other countries have accounted for nearly half of illegal border crossings. The Biden administration also ended the practice of detaining families in 2021. Families may be responding. Families crossing the border made up about a fifth of total border apprehensions. In both August and September, that share rose to about half.

Takeaways by Macro Roundup® AI

  1. Illegal crossings at the U.S.-Mexico border exceeded two million for the second consecutive year, historic highs, according to government data.
  2. Title 42, enacted under the Trump administration to quickly expel illegal migrants, expired in May, and illegal border crossings have risen since then.
  3. Families made up about a fifth of total border apprehensions, a share that rose to about half in both August and September; the Biden administration ended the detention of families in 2021.

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AI Summary. Rates of self-harm episodes among adolescents in the U.S., UK, Canada, Australia, and New Zealand have increased since 2010, especially for girls, reaching record-high levels in all five countries. The author links this to a five-year period in which adolescents shifted from basic phones to smartphones with continuous internet and social media access.

Zach Rausch and Jon Haidt After Babel
Date Posted:

Rates of self-harm among young girls have increased since 2010 across the U.S., UK, Canada, Australia, and New Zealand. @JonHaidt @ZachMRausch note that this coincides with the transition of adolescent social life to smartphones and social media.

Did the shift to smartphones raise adolescent self-harm rates, especially for girls?

Core argument: Self-harm episode rates among adolescents in the U.S., UK, Canada, Australia, and New Zealand have risen since 2010, with the increase especially pronounced for girls, reaching record-high levels in all five countries by 2015.

After examining data from the Anglosphere (U.S., UK, Canada, Australia, and New Zealand), I’ve found that one trend stands out above all others: the spike in anxiety, depression, and self-harm among adolescent girls that began in the early 2010s. Since 2010, rates of self-harm episodes have increased for adolescents in the Anglosphere countries, especially for girls. By 2015, self-harm episodes were at record-high levels in all five countries. I have added a shaded area on all graphs from 2010 to 2015, which is the period that Jon calls “The Great Rewiring of Childhood” in his forthcoming book, The Anxious Generation. It’s the five-year period when adolescence changed to a phone-based form; adolescents went from nearly all owning flip phones (or other basic phones) to nearly all owning smartphones with high-speed data plans and continuous (and nearly unlimited) access to the internet and social media.

Takeaways by Macro Roundup® AI

  1. Self-harm episode rates among adolescents in the U.S., UK, Canada, Australia, and New Zealand have risen since 2010, with the increase especially pronounced for girls, reaching record-high levels in all five countries by 2015.
  2. The spike in anxiety, depression, and self-harm among adolescent girls that began in the early 2010s stands out above all other trends in the Anglosphere data examined.
  3. The 2010–2015 period, called "The Great Rewiring of Childhood" in the forthcoming book The Anxious Generation, is when adolescents shifted from basic phones to smartphones with high-speed data plans and continuous access to the internet and social media.

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