Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, November 2, 2023

AI Summary. As the Federal Reserve shrinks its bond portfolio, the authors argue private investors, U.S. and foreign, are the more likely buyers of Treasury securities, since their purchases respond to yields and their holdings tilt toward longer-maturity bonds. Foreign governments have not materially added to their Treasury holdings in almost a decade and tend to hold shorter-maturity bonds.

Alexandra Tabova and Francis Warnock National Bureau of Economic Research
Date Posted:

Alexandra Tabova and Francis Warnock find that two of three major purchasers of Treasuries, US private purchasers and foreign private purchasers, have elastic demand curves, implying that rates will tend to go higher as Treasury issuance increases.

Who will buy Treasuries as the Fed shrinks its portfolio?

Core argument: Foreign governments have not materially added to their Treasury portfolios in almost a decade.

Our results have implications for a pressing question as we transition to a post-QE world: Who will buy Treasuries as the Fed reduces the size of its portfolio? Perhaps foreign governments, but they have not materially added to their Treasury portfolios in almost a decade. Moreover, they tend to hold shorter duration bonds, while the Fed’s portfolio is tilted more towards longer durations. More likely it will be private investors, whether U.S. or foreign, whose purchases react to yields and whose portfolios are tilted towards longer duration bonds.

Takeaways by Macro Roundup® AI

  1. Foreign governments have not materially added to their Treasury portfolios in almost a decade.
  2. Foreign governments tend to hold shorter-duration Treasuries, while the Federal Reserve's portfolio is tilted more toward longer durations.
  3. Private investors, U.S. and foreign, whose purchases react to yields and whose portfolios tilt toward longer-duration bonds, are the more likely buyers of Treasuries as the Federal Reserve reduces its portfolio.

Related Articles:

  • Slow Money — Life insurers and pension funds invest monthly premium and contribution inflows across assets including Treasuries, amounting to Treasury purchases at an annual rate of roughly $100bn. That falls far short of the trillions in coupon-bearing Treasury debt to be issued annually, so these managers will not be the marginal buyer the market seeks.
  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • Who Has Been Buying U.S. Treasury Debt? — Net purchases of U.S. Treasury securities by the "households and nonprofits" category have soared, more than offsetting sales and redemptions by money market funds, the Federal Reserve, and banks; much of this buying likely reflects hedge funds. The composition of Treasury financing has shifted dramatically as bond prices fell.

AI Summary. The US Treasury said it will keep raising two- and five-year note auction sizes by $3bn per month while slowing increases in longer-dated debt, lifting 10-year note auctions by $2bn and 30-year bond auctions by $1bn. Its quarterly refunding will total $112bn, down from $114bn.

Kate Duguid and Mary McDougall Financial Times
Date Posted:

Following weak demand for long-dated Treasuries, the US Treasury is slowing the pace of longer-term issuance, and increasing the issuance of short-dated notes.

Following weak demand for long-dated Treasuries, the US Treasury is slowing the pace of longer-term issuance, and increasing...

Is the Treasury shifting borrowing toward shorter-dated debt?

Core argument: The US Treasury will slow the pace of longer-dated debt issuance, raising 10-year note auctions by $2bn and 30-year bond auctions by $1bn, down from the $3bn and $2bn increases made in August.

The Treasury said on Wednesday that it would continue to increase issuance of shorter-dated notes at the pace it set three months ago while slowing the pace of 10- and 30-year bond issues. To satisfy its borrowing needs, the Treasury will raise the auction sizes of the two- and five-year notes by $3bn per month, with a rise in 10-year note auctions by $2bn and in 30-year bond auctions by $1bn. In August, the Treasury had increased its 10-year auctions by $3bn and its 30-year auctions by $2bn. In its quarterly refunding auctions next week, the Treasury Department will sell $112bn worth of debt, lower than the $114bn put on offer in the previous quarter. Primary dealers had anticipated the Treasury would auction $114bn this quarter too.

Takeaways by Macro Roundup® AI

  1. The US Treasury will slow the pace of longer-dated debt issuance, raising 10-year note auctions by $2bn and 30-year bond auctions by $1bn, down from the $3bn and $2bn increases made in August.
  2. The US Treasury will keep increasing shorter-dated issuance at the pace set three months earlier, lifting two- and five-year note auction sizes by $3bn per month.
  3. The Treasury Department's quarterly refunding auctions will total $112bn, below the $114bn offered in the previous quarter and the $114bn primary dealers had anticipated.

Related Articles:

  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • Maxing Out — Hedge funds became a major buyer of US Treasuries after the Federal Reserve and commercial banks stepped back, financing those purchases through dealer repurchase agreements that grew rapidly and then stalled. If these leveraged buyers are hitting financing limits set by dealer balance sheet costs, a new marginal buyer must emerge to absorb upcoming issuance.
  • 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.

AI Summary. National debt is considered sustainable when it grows more slowly than gross domestic product, so when the average interest rate on government debt (R) is below the economy's growth rate (G), debt can be sustainable even if non-interest spending exceeds revenue. R has been below G over the past 15 years.

Marc Goldwein Committee for a Responsible Federal Budget
Date Posted:
Is Database:
Database

Noting for the past 15 years R < G, @MarcGoldwein argues that in a world where R > G, at current debt stocks and primary deficits, the US will face a debt spiral.

How does the interest rate relative to growth determine debt sustainability?

Core argument: The average interest rate on U.S. government debt (R) has run below the average growth rate of the U.S. economy (G) for the last 15 years.

Debt Sustainability = When national debt grows slower than gross domestic product (GDP) or expected to stop growing before getting too high. Average interest rate on government debt (R) describes the growth of current debt, while G the average growth rate of U.S. economy represents its erosion (relative to GDP). When R<G, debt may be sustainable even when non-interest spending exceeds revenue. When R<G, one-time borrowing has little effect on long-term debt-to-GDP. For the last 15 years, R has been below G.

Takeaways by Macro Roundup® AI

  1. The average interest rate on U.S. government debt (R) has run below the average growth rate of the U.S. economy (G) for the last 15 years.
  2. When R is below G, national debt may be sustainable even when non-interest spending exceeds revenue.
  3. Debt is sustainable when it grows more slowly than GDP or is expected to stop growing before reaching too high a level, and with R below G one-time borrowing has little effect on long-term debt-to-GDP.

Related Articles:

  • When Does Federal Debt Reach Unsustainable Levels? — 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.
  • Are High Interest Rates the New Normal? — The rise in interest rates reflects higher real interest rates rather than inflation expectations, since breakeven rates—the gap between yields on ordinary bonds and inflation-indexed bonds—indicate markets expect inflation to stay under control. Real rates well above 2%, up from below 1% before the pandemic, may prove transitory.
  • 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. Cumulative real GDP growth over the past year reached 2.9%, recovering from 2022 lows and returning to levels in line with the high-growth years of the 2010s. Year-on-year nominal economic output growth picked up to 6.3%, while the inflation gap between real and nominal growth narrowed to its smallest level since early 2021.

Joseph Politano Apricitas Economics
Date Posted:

Cumulative real GDP growth in the year ending Q3 was 2.9%, “returning to levels more in line with the high growth years in the 2010s.” @JosephPolitano

Has economic growth returned to its strong prior decade pace?

Core argument: U.S. cumulative real GDP growth over the last year reached 2.9%, continuing to bounce back from its 2022 lows and returning to levels more in line with the high-growth years of the 2010s.

Cumulative real GDP growth over the last year to 2.9%, continuing to bounce back from its 2022 lows and returning to levels more in line with the high growth years of the 2010s. In fact, these numbers are so strong that GDP could shrink by 0.8% annualized in Q4 and still match the median FOMC participants’ growth projections from last month. Year-on-year growth in nominal, non-inflation-adjusted, economic output picked up again to 6.3%, but even still the inflation gap between real and nominal GDP growth shrank to the smallest level since early 2021.

Takeaways by Macro Roundup® AI

  1. U.S. cumulative real GDP growth over the last year reached 2.9%, continuing to bounce back from its 2022 lows and returning to levels more in line with the high-growth years of the 2010s.
  2. Real GDP could shrink by 0.8% annualized in the fourth quarter and still match the median FOMC participants' growth projections from last month.
  3. Year-on-year growth in nominal, non-inflation-adjusted economic output picked up to 6.3%, while the gap between nominal and real GDP growth shrank to its smallest level since early 2021.

Related Articles:

  • An Update from Our CIOs: Entering the Second Stage of Tightening — A second stage of the monetary tightening cycle is led by long-term interest rates: after a period when short-term rate hikes continued but bond yields traded sideways, long-term yields resumed rising. The earlier reprieve reflected market expectations of future easing and Treasury issuance shifted toward short-term bills funded by excess central bank reserves.
  • Why No Recession (Yet)? — 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.
  • Will A.I. Transform the Economy, and if So, How? — During the 1995-2005 information technology boom, productivity ended about 12% above the trend implied by growth from 1973 to 1995, and a comparable or larger gain of around 15% from artificial intelligence is plausible. If such optimistic estimates hold, growth would exceed conventional long-run estimates such as the Federal Reserve's roughly 1.8%, lifting revenue and easing debt concerns.

AI Summary. AI regulation locks in incumbents, and the early AI winners promoting alarm in Washington about AI risks are engaged in regulatory capture, seeking rules that hobble future competitors while continuing their own development. Such an executive order is proscriptive rather than adaptive and presumes knowledge of an unknowable future.

Ben Thompson Stratechery
Date Posted:

.@benthompson sees President Biden’s executive order proscribing AI development as “blocking progress and hindering the solutions to our greatest challenges.”

.@benthompson sees President Biden’s executive order proscribing AI development as “blocking progress and hindering...

Does AI regulation entrench incumbents at the expense of future competitors?

Core argument: The author argues that the early AI winners are the most invested in generating alarm in Washington about AI while continuing their own work, since regulation locks in incumbents and concerns about imagined harms would kneecap competitors.

If you accept the premise that regulation locks in incumbents, then it sure is notable that the early AI winners seem the most invested in generating alarm in Washington, D.C. about AI. This despite the fact that their concern is apparently not sufficiently high to, you know, stop their work. No, they are the responsible ones, the ones who care enough to call for regulation; all the better if concerns about imagined harms kneecap inevitable competitors. In short, this Executive Order is a lot like Bill Gates’ approach to mobile: rooted in the past, yet arrogant about an unknowable future; proscriptive instead of adaptive; and, worst of all, trivially influenced by motivated reasoning best understood as some of the most cynical attempts at regulatory capture the tech industry has ever seen.

Takeaways by Macro Roundup® AI

  1. The author argues that the early AI winners are the most invested in generating alarm in Washington about AI while continuing their own work, since regulation locks in incumbents and concerns about imagined harms would kneecap competitors.
  2. The author characterizes the AI Executive Order as proscriptive instead of adaptive and rooted in the past yet arrogant about an unknowable future, comparing it to Bill Gates' approach to mobile.
  3. The author describes the AI Executive Order as trivially influenced by motivated reasoning amounting to some of the most cynical attempts at regulatory capture the tech industry has seen.

Related Articles:

  • Artificial Intelligence Is A Familiar-Looking Monster, Say Henry Farrell and Cosma Shalizi — Markets and bureaucracies are enormous impersonal distributed systems of information-processing that make use of tacit knowledge no individual brain or government can comprehend, and large language models are another such system rather than something new. The authors argue individual freedom is preserved by setting these systems against one another.
  • Will A.I. Transform the Economy, and if So, How? — During the 1995-2005 information technology boom, productivity ended about 12% above the trend implied by growth from 1973 to 1995, and a comparable or larger gain of around 15% from artificial intelligence is plausible. If such optimistic estimates hold, growth would exceed conventional long-run estimates such as the Federal Reserve's roughly 1.8%, lifting revenue and easing debt concerns.
  • The Outlook for Long-Term Economic Growth — Growth theory holds that long-run growth in living standards is determined by growth in the worldwide number of people searching for ideas, and growth accounting for the US suggests temporary boosts from rising educational attainment and idea investment could fade. Potential offsets include China and India, better talent allocation, and artificial intelligence.

AI Summary. US full-service restaurants appear to have restructured toward operating with less labor, with higher minimum wages likely factoring into those decisions. Labor productivity, measured as real output per hour worked, grew at a 1.2% annualized rate over an earlier six-year stretch, then jumped 21% in a single year, retaining most of that gain after a slight pullback.

Justin Fox Bloomberg
Date Posted:
Is Database:
Database

In response to higher wages associated with the pandemic, the US restaurant sector has significantly improved productivity: from a 1.2%/year rate from 2014-20, productivity jumped 21% in 2021 and has retained most of those gains. @foxjust

Are restaurants operating with less labor after higher wages?

Core argument: Labor productivity at full-service restaurants jumped 21% in 2021 after rising at a 1.2% annualized rate from 2014 to 2020, and despite receding slightly the following year, most of those gains remain intact.

It does seem as if employers in the sector have made peace with having fewer workers — and not unreasonable to think that higher minimum wages are playing some role in their calculations. The shock of the pandemic and the accompanying labor shortages allowed for and in many cases required a rethinking of how to do business in a way that the pre-pandemic wage increases did not, and restaurants overall appear to have found a way to do this with less labor. The best measure of this is real output per hour worked, aka labor productivity. After years of little to no growth at full-service restaurants, it rose at a 1.2% annualized rate from 2014 to 2020, then jumped 21% in 2021. It receded a little last year, but most of its gains are still intact.

Takeaways by Macro Roundup® AI

  1. Labor productivity at full-service restaurants jumped 21% in 2021 after rising at a 1.2% annualized rate from 2014 to 2020, and despite receding slightly the following year, most of those gains remain intact.
  2. Restaurant employers appear to have made peace with operating with fewer workers, with higher minimum wages plausibly playing some role in their calculations.
  3. The pandemic shock and accompanying labor shortages allowed for and often required a rethinking of restaurant operations that pre-pandemic wage increases did not, and restaurants overall appear to have found a way to operate with less labor.

Related Articles:

  • Detroit Is Paying Up to End the UAW Strike. Now Carmakers Will Live With the Costs — Tentative United Auto Workers agreements with Detroit automakers include a 25% general wage increase over four years, which with cost-of-living adjustments would lift top production-worker pay to about $42 an hour and most unionized workers' annual pay into the mid-$80,000s before overtime. Ford says the contract would add $850–$900 in costs per vehicle.
  • The Unexpected Compression: Competition at Work in the Low Wage Labor Market — The authors estimate that post-pandemic labor market tightness compressed the US wage distribution, reducing the college wage premium and offsetting roughly one-quarter of the four-decade rise in 90-10 wage inequality. They attribute this in part to greater labor supply elasticity facing firms in low-wage markets, which reduced employer market power as young non-college workers moved to higher-paying jobs.
  • Wendy’s, Google Train Next-Generation Order Taker: An AI Chatbot — Wendy's is automating drive-through ordering with an artificial-intelligence chatbot built on natural-language software from Google and trained to understand the many ways customers order off the menu.

AI Summary. An analysis of trade and investment data identifies Vietnam, Poland, Mexico, Morocco, and Indonesia as "connector" economies positioning themselves as links between the US and China and between China, Europe, and other Asian economies. Together they account for 4% of global output but have attracted slightly over 10%, or $550bn, of greenfield investment.

Enda Curran, Shawn Donnan, and Maeva Cousin Bloomberg
Date Posted:

According to a Bloomberg analysis, five countries (Vietnam, Poland, Mexico, Morocco, and Indonesia) are disproportionately benefiting as “connectors” in a balkanizing global economy.

Are some economies gaining outsized investment by linking rival trading blocs?

Core argument: Vietnam, Poland, Mexico, Morocco, and Indonesia account for 4% of global GDP but have attracted slightly over 10% of all greenfield investment since 2017, or $550 billion, according to Bloomberg Economics and Bloomberg Businessweek.

In collaboration with Bloomberg Economics, Bloomberg Businessweek took a dive into trade and investment data and found five nations straddling the new geopolitical fault lines: Vietnam, Poland, Mexico, Morocco, and Indonesia. As a group, these countries logged $4 trillion in economic output in 2022—more than India and almost as much as Germany or Japan. Despite their very different politics and pasts, they share an opportunistic desire to seize the economic windfall to be had by positioning themselves as new links between the US and China—or China, Europe, and other Asian economies. They represent 4% of global gross domestic product, yet they’ve attracted slightly over 10%, or $550 billion, of all so-called greenfield investment since 2017.

Takeaways by Macro Roundup® AI

  1. Vietnam, Poland, Mexico, Morocco, and Indonesia account for 4% of global GDP but have attracted slightly over 10% of all greenfield investment since 2017, or $550 billion, according to Bloomberg Economics and Bloomberg Businessweek.
  2. Vietnam, Poland, Mexico, Morocco, and Indonesia logged $4 trillion in combined economic output in 2022, more than India and almost as much as Germany or Japan.
  3. Despite differing politics and histories, the five nations share an opportunistic aim to position themselves as new links between the US and China, or between China, Europe, and other Asian economies.

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.
  • Hidden Exposure: Measuring U.S. Supply Chain Reliance — The US buys at least 80% of industrial inputs domestically, so aggregate foreign supply chain exposure is limited, but disruptions occur at the sector level rather than the macro level. Accounting for Chinese inputs embedded in goods bought from other foreign suppliers, US exposure to China is almost 4x larger than it appears at face value.
  • Sester On Kearney Reshoring Index — US imports from Southeast Asia have risen, but China's reported exports to the US exceed recorded US imports from China by about 10%, reflecting incentives to shift final assembly and to avoid tariffs. Trade data cannot show how much Chinese content is embedded in rising Southeast Asian imports.

Friday, November 3, 2023

AI Summary. Price increases have decelerated from about 6% to 3% a year while growth in the dollar value of spending and incomes has slowed much less, from about 7% to 6%, translating into faster growth in American living standards. The author argues real growth may slow, but it is less clear why nominal growth would.

Matt Klein The Overshoot
Date Posted:

Noting strong nominal wage growth, @M_C_Klein argues that short-term interest rates may need to stay at current levels or rise to prevent borrowing and spending from accelerating.

Will nominal spending growth slow as inflation decelerates?

Core argument: U.S. price increases have decelerated from roughly 6% a year to 3% a year, while growth in the dollar value of spending and incomes slowed only from about 7% to 6%, translating into a large acceleration in Americans' living standards.

While there has been a significant deceleration in the rate of price increases from around 6% a year to 3% a year, the growth rate of the dollar value of spending and incomes has slowed by much less (from 7% a year to 6% a year). So far, this has translated into a massive acceleration in the growth rate of Americans’ living standards. I can think of two basic reasons why the (simple-minded) benign forecast that we will stay in a world with 6% nominal and 3% real growth might not turn out to be correct: Financial constraints force nominal spending to slow. Real constraints worsen the tradeoff between total spending and inflation. The short version is that while real growth may slow, it is much less clear why nominal growth would slow.

Takeaways by Macro Roundup® AI

  1. U.S. price increases have decelerated from roughly 6% a year to 3% a year, while growth in the dollar value of spending and incomes slowed only from about 7% to 6%, translating into a large acceleration in Americans' living standards.
  2. Two reasons the benign forecast of 6% nominal and 3% real growth might not hold are financial constraints forcing nominal spending to slow and real constraints worsening the tradeoff between total spending and inflation.
  3. Real growth may slow, but it is much less clear why nominal growth would slow.

Related Articles:

  • An Update from Our CIOs: Entering the Second Stage of Tightening — A second stage of the monetary tightening cycle is led by long-term interest rates: after a period when short-term rate hikes continued but bond yields traded sideways, long-term yields resumed rising. The earlier reprieve reflected market expectations of future easing and Treasury issuance shifted toward short-term bills funded by excess central bank reserves.
  • 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.
  • Why No Recession (Yet)? — 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.

AI Summary. Women make up 35% of workers in the 10 highest-paying US occupations, up from 13% in 1980, but remain below their 47% share of the overall workforce and are a minority in nine of those 10 occupations, pharmacists being the exception at 61%.

Kiley Hurst and Richard Fry Pew Research Center
Date Posted:

According to @pewresearch analysis, women made up 35% of workers in the 10 highest-paying occupations in 2021, up from 13% in 1980. 47% of the US workforce is female.

How much of the highest-paying occupations do women now hold?

Core argument: Women make up 35% of workers in the 10 highest-paying U.S. occupations, up from 13% in 1980, but that share remains below their 47% share of the overall U.S. workforce.

Women now make up 35% of workers in the United States’ 10 highest-paying occupations – up from 13% in 1980. They have increased their presence in almost all of these occupations, which include physicians, lawyers, and pharmacists. Women remain the minority in nine of the 10 highest-paying occupations. The exception is pharmacists, 61% of whom are women. More broadly, the share of women across all 10 of these occupations (35%) remains well below their share of the overall U.S. workforce (47%). Women remain in the minority among those receiving certain bachelor’s degrees required for some high-paying occupations. Mathematics or statistics: 42% of recipients today are women, unchanged from 1980. Physics: 25% of recipients are women, versus 13% in 1980. Engineering: 23% of recipients are women, versus 9% in 1980.

Takeaways by Macro Roundup® AI

  1. Women make up 35% of workers in the 10 highest-paying U.S. occupations, up from 13% in 1980, but that share remains below their 47% share of the overall U.S. workforce.
  2. Women are a minority in nine of the 10 highest-paying occupations, the exception being pharmacists, 61% of whom are women.
  3. Women receive 42% of bachelor's degrees in mathematics or statistics, unchanged from 1980, 25% in physics versus 13% in 1980, and 23% in engineering versus 9% in 1980.

Related Articles:

AI Summary. Canada's Conservative Party has doubled its vote share and moved into the lead, which the author attributes to an explicitly pro-youth platform centered on housebuilding, including proposals to withhold funds from cities that don't build enough housing and reward those that do. Housing affordability ranks as the second most important issue in Canada, behind the broader cost-of-living crisis.

John Burn-Murdoch Financial Times
Date Posted:

A third of US under-30s voted Republian in the 2022 mid-terms, relative to 40% support for Canadian Conservatives. @jburnmurdoch argues this is driven by Canada’s Conservatives taking on housing affordability as their key issue.

Can a pro-housebuilding platform win young voters for conservatives?

Core argument: Canada's Conservatives have doubled their vote share and moved into the lead, which the article attributes to an explicitly pro-youth platform centered on housebuilding rather than mere opposition to the incumbent.

You don’t double your vote share and surge into the lead simply by not being the other guy. Instead, the explanation appears to lie in a bold and explicitly pro-youth policy position: the Canadian Conservatives have come out as the party of housebuilding. Housing affordability crises are widespread across the West, but Canada’s is especially acute, now ranking as the second most important issue facing the country behind the wider cost of living crisis. For months, Canadian voters have said they don’t think the government is focused enough on tackling the problem, creating space for the opposition to make its own pitch. Canadian Tory leader Pierre Poilievre has grasped the opportunity with both hands. The 44-year-old, who assumed the party leadership just over a year ago, has made housing one of his principal causes, outlining proposals that would withhold funds from cities that don’t build enough houses, and give extra money to those that do.

Takeaways by Macro Roundup® AI

  1. Canada's Conservatives have doubled their vote share and moved into the lead, which the article attributes to an explicitly pro-youth platform centered on housebuilding rather than mere opposition to the incumbent.
  2. Housing affordability ranks as the second most important issue facing Canada, behind the broader cost of living crisis, and voters have said for months that the government is not focused enough on the problem.
  3. Conservative leader Pierre Poilievre, 44 and in the job just over a year, proposes withholding funds from cities that fail to build enough houses and giving extra money to those that do.

Related Articles:

  • Millennials are Shattering the Oldest Rule in Politics — British "silent generation" and baby boomers grew more conservative with age, and Gen X is following the same path, but millennials, born 1981-1996, diverged from that trajectory. The most likely explanation is a cohort effect, with US survey data showing millennials favoring greater redistribution from rich to poor than earlier generations.
  • Is the Surge to the Left Among Young Voters a Trump Blip or the Real Deal? — Data from the Cooperative Election Study show millennials and Gen Z have voted increasingly for Democratic House candidates over time, contrary to the adage that voters grow more conservative as they age. One political scientist notes such generational shifts translate slowly into vote share and can be offset by Republican gains elsewhere.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.

AI Summary. China's Ministry of Industry and Information Technology reports that strategic emerging industries, including new-generation information technology, high-end equipment, and new energy vehicles, accounted for more than 13% of GDP. China became the world's largest vehicle exporter, with car exports reaching 2.34m units, up 77% year on year, and accounted for 60% of global electric car sales.

Chuqin Jiang South China Morning Post
Date Posted:

China is seeking to offset the slowdown in their property sector with new industrial “pillars” like information technology, high-end equipment, and EVs. @SCMPNews

Can emerging industries replace property as China's growth engine?

Core argument: China's strategic emerging industries, including new-generation information technology, high-end equipment, and new energy vehicles, accounted for more than 13% of GDP in added value last year, according to the Ministry of Industry and Information Technology.

Last year, the added value of strategic emerging industries such as new-generation information technology, high-end equipment, and new energy vehicles made up more than 13% of GDP, according to the Ministry of Industry and Information Technology. Chang, from Fitch Bohua, said the automotive industry is particularly notable as China became the largest exporter of vehicles in the first half of 2023. The total number of exported cars reached 2.34 million, an increase of 77% compared to the same period last year. The added value of the automobile manufacturing industry increased by 11.4%, year on year, in the first nine months of 2023, 7.4pp higher than the added value of all industries with annual revenue above 20 million yuan (US$2.73 million) in the same period. As of the end of September, China had 18.2 million new energy vehicles on the road, leading the EV revolution with a 60% share of global electric car sales.

Takeaways by Macro Roundup® AI

  1. China's strategic emerging industries, including new-generation information technology, high-end equipment, and new energy vehicles, accounted for more than 13% of GDP in added value last year, according to the Ministry of Industry and Information Technology.
  2. China became the world's largest vehicle exporter in the first half of 2023, shipping 2.34 million cars, up 77% from the same period a year earlier, according to Chang of Fitch Bohua.
  3. Added value in China's automobile manufacturing industry rose 11.4% year on year in the first nine months of 2023, 7.4 percentage points above the gain for all industries with annual revenue above 20 million yuan (US$2.73 million).

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AI Summary. China is shifting investment from its weakened property sector toward manufacturing, which already accounts for 27% of Chinese GDP versus 14% elsewhere and is constrained by weak demand rather than scarce capital. Since China holds about 18% of global GDP but 30% of global manufacturing, added output must be absorbed abroad absent higher consumption.

Michael Pettis @michaelxpettis
Date Posted:

Noting manufacturing is 27% of China’s GDP relative to 18% of global GDP, @michaelxpettis argues that China’s aggressive export strategy will likely drive increased political stress around trade policy particularly in Europe.

Noting manufacturing is 27% of China’s GDP relative to 18% of global GDP, @michaelxpettis argues that China’s...

Must the rest of the world absorb China's shift toward manufacturing?

Core argument: Manufacturing accounts for 27% of China's GDP versus 14% for the rest of the world, and Pettis argues its binding constraint is weak demand rather than scarce capital.

Chinese policy-makers are trying to prevent property-sector contraction from forcing them to cut back on overall investment by shifting investment from the degraded property sector towards manufacturing. But manufacturing already accounts for an outsized 27% of China's GDP, compared to 14% for the rest of the world, and absorbs a huge amount of low-cost investment. What's more, its biggest constraint is weak demand, not scarce capital. What is more, while expansion in property must be absorbed internally, expansion in manufacturing can only be absorbed internally if there is an equivalent expansion in consumption. Otherwise, it must be absorbed by the rest of the world. China comprises roughly 18% of global GDP but already accounts for 30% of global manufacturing. If manufacturing replaces property as the engine of economic activity, this suggests China's share of global manufacturing must rise faster than its share of global GDP.

Takeaways by Macro Roundup® AI

  1. Manufacturing accounts for 27% of China's GDP versus 14% for the rest of the world, and Pettis argues its binding constraint is weak demand rather than scarce capital.
  2. China represents roughly 18% of global GDP but 30% of global manufacturing, which suggests that if manufacturing replaces property as the engine of activity, its manufacturing share must rise faster than its GDP share.
  3. Pettis argues that property expansion must be absorbed domestically, while manufacturing expansion can be absorbed internally only alongside an equivalent rise in consumption, and otherwise must be absorbed by the rest of the world.

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  • China’s Auto Export Wave Echoes Japan’s in the ’70s — The shift from petroleum-fueled internal combustion vehicles to electric vehicles moves resource leverage from Persian Gulf oil producers to critical minerals, with China holding more than half of global processing capacity for lithium, cobalt, and graphite and about a third for nickel. Chinese companies have spent $4.5bn acquiring stakes in nearly 20 lithium mines, mostly in Latin America and Africa.
  • Breaking Down China’s Manufacturing — About 40–45% of China's manufacturing output comes from exports and 55–60% from domestic demand, making the sector mainly domestically oriented while still relying substantially on external demand. Estimates extending the data beyond the available database suggest the export share has picked up, reflecting a pandemic-era export boom.

AI Summary. Chinese factories are substituting domestic or developing-nation suppliers for Western chemicals, parts, and machine tools, and China trades more with Southeast Asia than with the U.S. and more with Russia than with Germany. China's share of U.S. imports fell from as much as 22% to 14%, though bilateral trade grew in dollar terms.

Jason Douglas and Tom Fairless Wall Street Journal
Date Posted:
Is Database:
Database

China is offsetting reduced exports to the US and Europe with exports to the rest of the world, especially Brazil, Russia, India, and South Africa.

Is the world economy splitting into U.S. and Chinese trading blocs?

Core argument: U.S. imports from China fell to 14% of all U.S. imports in the 12 months through August, down from as much as 22% in mid-2018, according to Census Bureau data, though bilateral trade has grown in dollar terms.

Chinese factories are replacing Western chemicals, parts, and machine tools with those from home or sourced from developing nations. China’s trade with Southeast Asia surpassed its trade with the U.S. in 2019. China now trades more with Russia than it does with Germany, and soon will be able to say the same about Brazil. German and Japanese automakers like Volkswagen and Toyota now account for about 30% of China’s auto market, down from almost 50% three years ago, as Chinese brands have expanded, according to the China Association of Automobile Manufacturers. U.S. imports from China in mid-2018 accounted for as much as 22% of all its imports. In the 12 months through August, that had shrunk to 14%, according to Census Bureau data, though in dollar terms bilateral trade has grown.

Takeaways by Macro Roundup® AI

  1. U.S. imports from China fell to 14% of all U.S. imports in the 12 months through August, down from as much as 22% in mid-2018, according to Census Bureau data, though bilateral trade has grown in dollar terms.
  2. German and Japanese automakers including Volkswagen and Toyota account for about 30% of China's auto market, down from almost 50% three years earlier as Chinese brands expanded, according to the China Association of Automobile Manufacturers.
  3. China's trade with Southeast Asia surpassed its trade with the U.S. in 2019, and China now trades more with Russia than with Germany, with Brazil soon to follow.

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  • 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.