Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…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
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, February 27, 2024

AI Summary. The authors estimate about 4% of US office buildings—older, unrenovated properties with vacancy above 30%—may no longer be viable as offices, with prices in the hardest-hit cities down 15-35%. They find acquisition prices would need to fall almost 50% in the five metro areas most affected by remote work for conversion to apartments to be financially feasible.

Elsie Peng and Vinay Viswanathan Goldman Sachs
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A @GoldmanSachs analysis suggests prices for older, high-vacancy office buildings would need to fall almost 50% nationally to make residential conversion economically viable.

How far must office prices fall to make apartment conversions feasible?

Core argument: The authors estimate that about 4% of US office buildings—older, unrenovated stock with vacancy above 30%—might no longer be viable as offices, with average transaction prices down 11% since 2019, rising to 14–16% of offices in the hardest-hit cities, where prices have fallen 15–35%.

We estimate that around 4% of US office buildings—those located in suburban areas or central business districts, built 30 or more years ago, not renovated since 2000, and currently facing vacancy rates above 30%—might be no longer viable as offices. The average transaction price of these offices has declined by 11% since 2019. In the hardest-hit cities, as many as 14-16% of offices may no longer be viable by our definition, and their average transaction prices have already fallen by 15-35% since 2019. Using a discounted cash flow model, we show that current acquisition costs for struggling offices are still too high for conversion to a multifamily building to be financially feasible once we account for the high additional costs of conversion and financing. For the top 5 metropolitan areas that are most affected by remote work, we estimate that office acquisition prices would need to fall almost 50% for conversion to be financially feasible. Because the conversion process is slow and costly, available office space is likely to remain excessive and many buildings are likely to remain underutilized. As a result, we expect new office investment to remain sluggish in the next few years, resulting in a 0.2pp drag on fixed private investment growth.

Takeaways by Macro Roundup® AI

  1. The authors estimate that about 4% of US office buildings—older, unrenovated stock with vacancy above 30%—might no longer be viable as offices, with average transaction prices down 11% since 2019, rising to 14–16% of offices in the hardest-hit cities, where prices have fallen 15–35%.
  2. Using a discounted cash flow model, the authors estimate that office acquisition prices in the top 5 metropolitan areas most affected by remote work would need to fall almost 50% for office-to-multifamily conversion to be financially feasible, given high conversion and financing costs.
  3. Because conversion is slow and costly, the authors expect excess office space and underutilized buildings to persist and new office investment to remain sluggish over the next few years, resulting in a 0.2pp drag on fixed private investment growth.

Related Articles:

  • Work From Home and the Office Real Estate Apocalypse — The authors estimate New York City office values fell 45% in 2020 and 39% in the longer run, a $453bn value destruction, with lower-quality buildings hit hardest as tenants shifted to higher-quality space. They argue this has implications for local public finances and financial sector stability.
  • Remote Work, Three Years Later — Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
  • Financial Storm Bears Down On US Commercial Real Estate — Broker JLL estimates New York office buildings have lost $76bn in value from their most recent sales prices, with 73 worth less than their loan balances. One broker estimates only the top 10% of New York offices are not distressed by debt levels or occupancy, though low sales volumes may mask the damage.

AI Summary. Real household net worth peaked at about $13tn above its pre-pandemic projected path before falling back to that path, while real financial assets peaked roughly $10tn above trend and then dropped to about $7.3tn below it. The shortfall in financial assets is attributed mainly to lower equity holdings, which fell 17%.

Hamza Abdelrahman, Luiz Edgard Oliveira, and Adam Shapiro Federal Reserve Bank of San Francisco
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According to a @sffed analysis, real household wealth, including unrealized capital gains, is back in line with pre-pandemic projections as of Q3 2023. @ah_shapiro

Has pandemic excess household wealth returned to its pre-pandemic trend?

Core argument: Real household financial asset holdings peaked at $10 trillion above their projected path in mid-2021 before returning to the projected trend in mid-2022.

Overall real household wealth has returned to its expected pre-pandemic projection. Real net worth (blue solid line) peaked in the last quarter of 2021 at about $13 trillion higher than the projected path (blue dashed line). Since then, net worth has decreased rapidly towards its projected path. As of the third quarter of 2023, household wealth was close to its expected pre-pandemic projection. Repeating this analysis to focus on financial assets (red line), we find that household real financial asset holdings peaked at $10 trillion above their projected path in mid-2021 before returning to the projected trend in mid-2022. Since then, the decline in financial assets to about $7.3 trillion below the projected path has been mainly attributable to lower equity holdings, which decreased by 17% in 2022.

Takeaways by Macro Roundup® AI

  1. Real household financial asset holdings peaked at $10 trillion above their projected path in mid-2021 before returning to the projected trend in mid-2022.
  2. Household real financial assets have fallen to about $7.3 trillion below their projected path, a decline mainly attributable to lower equity holdings, which decreased by 17% in 2022.

Related Articles:

  • 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.
  • When Will There Be No More Excess Savings Left? — 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.
  • The Rich Have all the “Excess” Cash Now — Excess cash balances outside the top 1% have mostly disappeared, but the author argues their liquidation did little to finance consumer spending, which has been driven mainly by wage income. Relatively low household debt leaves many Americans room to spend above their income, potentially aided by lower interest rates.

AI Summary. China cannot build a developing-world trading bloc to replace the US and Europe as a source of end demand, because its trade surplus is too large and the main deficit countries outside the West are India and Turkey. India resists larger deficits with China, and Turkey needs to reduce its deficit.

Brad Setser @Brad_Setser
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Given the scale of Chinese supply, “It is fundamentally impossible for China to construct a block centered around the developing world that replaces the US/EU…as India is not prepared to run bigger deficits with China.” @Brad_Setser

Can China replace US and European demand with developing-world trade?

Core argument: Setser argues China cannot build a developing-world bloc that replaces the US and EU as sources of end demand, pointing to the size of China's surplus as the obvious problem.

It is fundamentally impossible for China to construct a block centered around the developing world that replaces the US/EU. There is an obvious problem, namely the size of China's surplus. [Aside from US/EU] the big deficits are in India and Turkey. That is a real problem for a Sinocentric block that aims to replace the US and Europe as a source of end demand. India is absolutely not prepared to run bigger deficits with China and Turkey really needs to bring its deficit down. India, remember, didn't join China's trade deal (unlike say Japan) and is exceptionally worried that Chinese exports are undermining its own manufacturing sector. Turkey competes with China in the EU market and isn't gonna give up the EU for China. The bigger point of course is that the world cannot really decouple so long as there are enormous surpluses and deficits across different parts of the global economy (and different political blocks).

Takeaways by Macro Roundup® AI

  1. Setser argues China cannot build a developing-world bloc that replaces the US and EU as sources of end demand, pointing to the size of China's surplus as the obvious problem.
  2. Outside the US and EU, the big trade deficits are in India and Turkey, and Setser holds that India is not prepared to run bigger deficits with China while Turkey needs to bring its deficit down.
  3. India declined to join China's trade deal, unlike Japan, and is worried that Chinese exports undermine its manufacturing sector, while Turkey competes with China in the EU market and will not give up the EU for China.

Related Articles:

  • China’s Plan to Reshape World Trade On Its Own Terms — Countries covered by China's free trade agreement network took about 38% of its merchandise exports, roughly $1.3tn out of some $3.43tn shipped worldwide over a 12-month period. That free trade footprint exceeds the total worldwide exports of the Netherlands or Japan, the world's fourth- and fifth-biggest exporters.
  • Can Trade Intervention Lead to Freer Trade? — China accounts for over 31% of global manufacturing but under 13% of global consumption, while the United States accounts for under 17% of manufacturing and nearly 27% of consumption. The author argues persistent surpluses reflect household subsidies to producers, and that the US could counter them with tariffs or taxes on capital inflows.
  • A Second Dose of Trump On Trade Would Differ From The First — A second Trump administration would pair a 10 percentage point tariff increase on all US trading partners with a tariff of at least 60% on Chinese imports, with advisers arguing a broad import tax addresses America's persistent pattern of trade deficits rather than bilateral imbalances. Researchers estimate China's manufacturing goods surplus reached a record of almost 2% of world GDP.

AI Summary. About 10.5m people living outside China are or once were Chinese citizens, a diaspora exceeded only by India's, Russia's, and Mexico's. Chinese citizens received more than 70% of 81,000 American investor visas issued to dollar-millionaires over a decade, and 18% of China's nearly 900 dollar-billionaires now live abroad, up from 6%.

Economist Staff The Economist
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Some 18% of China’s 900 dollar-billionaires now live abroad as part of the 10.5mm Chinese diaspora; 1.5% of all Chinese with investable of wealth over $1mm left the country in 2023.

Some 18% of China’s 900 dollar-billionaires now live abroad as part of the 10.5mm Chinese diaspora; 1.5% of all...

Are growing numbers of wealthy Chinese moving abroad?

Core argument: Some 18% of China's nearly 900 dollar-billionaires live abroad, up from 6% in 2019, according to Hurun's 2023 China Rich List.

There are about 10.5m people living outside China who are, or once were, Chinese citizens. Only the Indian, Russian, and Mexican diasporas are larger. Some of these Chinese are among the country’s richest people. More than 70% of the 81,000 investor visas issued by the American government to dollar-millionaires between 2010 and 2019 were given to Chinese citizens. There are signs that post-pandemic, the outflow of extreme wealth is accelerating. Some 18% of China’s nearly 900 dollar-billionaires live abroad, according to the 2023 China Rich List published by Hurun, a firm which tracks such things, up from 6% in 2019. Despite tightening capital controls, more than 13,500 people with investable wealth of $1m or more left China in 2023, according to Henley & Partners, a consultancy. It says this equates to around 1.5% of Chinese with that level of wealth. The less affluent are leaving too, often by perilous means. In 2023 nearly 53,000 Chinese were detained at the American border, compared with just over 1,000 in 2018, a far faster increase than for overall border arrests. In the first eight months of 2023, more than 13,000 Chinese tried to make it to America via the perilous Darien Gap forest area in Panama.

Takeaways by Macro Roundup® AI

  1. Some 18% of China's nearly 900 dollar-billionaires live abroad, up from 6% in 2019, according to Hurun's 2023 China Rich List.
  2. Henley & Partners reports that more than 13,500 Chinese with investable wealth of $1m or more left China in 2023, about 1.5% of Chinese at that wealth level, despite tightening capital controls.
  3. Nearly 53,000 Chinese were detained at the American border in 2023, compared with just over 1,000 in 2018, a far faster increase than for overall border arrests.

Related Articles:

  • 2023 Letter — Rising numbers of Chinese nationals are being apprehended at the US-Mexico border, with US officers encountering around 1,000 in one month early in the year and nearly 5,000 by November. Most Chinese emigrants leave through legal means, going primarily to Singapore, Japan, and Thailand.
  • America’s Southern Border Has Become A Global Crossroads — Migrants from countries other than Mexico, El Salvador, Guatemala, and Honduras made up more than half of all people apprehended at the US southern border for the first time, with Venezuelans the largest share. Crossings included 43,000 Russians, 42,000 Indians, and 24,000 Chinese, up from 4,100, 2,600, and 450 two years earlier.
  • 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.

Wednesday, February 28, 2024

AI Summary. The share of Americans who have ever married is at historic lows at ages 35 and 45, with about 60% of 35-year-old men ever-married compared with 90% in 1980. The author projects that one-third of men and women reaching age 45 by 2050 will never have married.

Lyman Stone Institute for Family Studies
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According to a @Lymanstoneky analysis about one-third of today’s 18 and 19 year old young Americans will not have married by the time they turn 45 in 2050.

How many young adults will never marry?

Core argument: About 60% of 35-year-old American men have ever been married, down from 90% in 1980, with ever-married shares at historic lows for both men and women at ages 35 and 45.

Ever-married shares today are at historic lows for 35-year-old and 45-year-old men and women. For instance, only about 60% of 35-year-old men are ever-married today, down from 90% in 1980. This trend also suggests that a growing share of Americans will not get married before their healthiest years are long past them. This figure also shows dotted lines for forecasts (or future estimates). I forecast rates by taking younger Americans about whom we know at least some of their marital history, and assuming that their marriage rates in the future follow the trends of past birth cohorts, while also accounting for some degree of delay-and-catchup dynamics. The decline in marriage at age 25 may now be subsiding, but the effects of past delays will continue into older ages. This means that plausibly, one-third of men and women who turn 45 in 2050 (those who are about 18 or 19 today) will not have married.

Takeaways by Macro Roundup® AI

  1. About 60% of 35-year-old American men have ever been married, down from 90% in 1980, with ever-married shares at historic lows for both men and women at ages 35 and 45.
  2. The author forecasts that roughly one-third of men and women turning 45 in 2050 — those about 18 or 19 today — will not have married, extrapolating past birth-cohort trends and allowing for delay-and-catchup dynamics.
  3. The decline in marriage at age 25 may be subsiding, but the author suggests the effects of past delays will continue into older ages, with a growing share of Americans not marrying before their healthiest years have passed.

Related Articles:

  • Young Adults in the U.S. Are Reaching Key Life Milestones Later Than in the Past — Pew Research Center analysis of Census Bureau data finds 21-year-olds in the US are less likely than their counterparts four decades earlier to have a full-time job, be financially independent, live on their own, be married, or have a child. Among 21-year-olds, 39% worked full time versus 64% four decades earlier, and a quarter were financially independent versus 42%.
  • Intermarriage in America Post-Loving v. Virginia — US interracial marriage rates showed no decline despite heightened public discourse about racial tension, a metric where increased racial tension would be expected to register. The author argues America's ethnoracial composition is more mixed than it has ever been, resembling a Latin American country more than a European one.
  • Fortunate Families? The Effects of Wealth on Marriage and Fertility — Using lottery winners, the authors estimate that wealth windfalls raise the short- and medium-run probability of marriage, an effect driven by male winners. The estimated average effect on marriage dissolution is not statistically distinguishable from zero, but for married women a 1M-SEK windfall nearly doubles the short-run divorce rate, with the effect fading over the long run.

AI Summary. South Korea's fertility rate fell to 0.72 expected births per woman over a lifetime from 0.78 the prior year, with births down 7.7% to 230,000 in a nation of about 50m, according to Statistics Korea. Marriages also hit a low, with about 192,500 couples wedding, down 42% from a decade earlier.

Sam Kim Bloomberg
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230,000 babies were born in South Korea in 2023 as fertility fell to .72 last year from .78 in 2022.

Is the world's lowest fertility rate still falling?

Core argument: South Korean births slid 7.7% to 230,000 last year, a low for comparable data in a nation of about 50 million people.

The number of babies expected per woman in a lifetime fell to 0.72 last year from 0.78 in 2022, according to data released Wednesday by South Korea’s national statistics office. The number of births also slid by 7.7% to 230,000, setting a new low for comparable data in a nation of about 50 million people. In 2022 marriages fell to a new low. While some 192,500 couples tied the knot, that was down 42% from decade earlier, according to Statistics Korea.

Takeaways by Macro Roundup® AI

  1. South Korean births slid 7.7% to 230,000 last year, a low for comparable data in a nation of about 50 million people.
  2. Marriages in South Korea fell to a new low in 2022, with some 192,500 couples wedding, down 42% from a decade earlier, according to Statistics Korea.

Related Articles:

  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.
  • Korea Finance Nominee Likens Aging Demographics to Titanic Iceberg — South Korea's finance minister nominee argues the country's aging population requires immediate preparation, noting efforts to raise the world's lowest fertility rate would take at least 30 years to yield benefits. A shrinking workforce is a major cause of South Korea's declining potential growth rate, with births per woman at 0.78.
  • How a Vast Demographic Shift Will Reshape the World — In East Asia and Europe, growing numbers of retirees will depend on a shrinking working-age population, and some Asian countries are aging before becoming rich — China hit its peak working-age population at 20% of US income levels at the same point, Vietnam at 14%.

AI Summary. Migrants listing addresses for US immigration court cases rose nine-fold in Illinois, seven-fold in Colorado, and five-fold in New York over a two-year span, larger increases than in Texas and Florida. On a per-capita basis, New York recorded the most arrivals at 1 per 100 residents, followed by New Jersey and Florida at 0.9.

Elena Mejia and Lisa Beyer Bloomberg
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According to a @markets analysis of new immigration court cases, 2% of the population of Queens, Miami and Denver are illegal migrants who arrived in 2023.

Which states are seeing the biggest increases in migrant arrivals?

Core argument: Migrants listing an Illinois address for their immigration court cases rose nine-fold in 2023 versus two years earlier, with seven-fold increases in Colorado and five-fold in New York—larger than the increases in Texas and Florida.

The number of migrants listing an address in Illinois for their immigration court cases jumped nine-fold in 2023 compared with just two years earlier; the increase was 7-fold in Colorado and five times in New York—bigger than the increases seen in Texas and Florida. The data also suggest that New York state saw the highest number of migrant arrivals in 2023 on a per capita basis: 1 per 100 residents of the state. New Jersey and Florida were next at 0.9. Texas and Colorado had 0.8, and Illinois ranked eighth at 0.6.

Takeaways by Macro Roundup® AI

  1. Migrants listing an Illinois address for their immigration court cases rose nine-fold in 2023 versus two years earlier, with seven-fold increases in Colorado and five-fold in New York—larger than the increases in Texas and Florida.
  2. Immigration court address data suggest New York state had the highest number of migrant arrivals per capita in 2023, at 1 per 100 residents, followed by New Jersey and Florida at 0.9.
  3. Texas and Colorado each recorded 0.8 migrant arrivals per 100 residents in 2023, while Illinois ranked eighth at 0.6.

Related Articles:

  • America’s Border Crisis in Ten Charts — Border apprehensions and expulsions of unauthorized migrants have reached record levels, with nearly 250,000 crossings in a single month. The Pew Research Center estimates 10.5m unauthorized immigrants live in the US, roughly 3% of residents and 22% of the foreign-born population—the lowest shares since the 1990s.
  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • What We Know About Unauthorized Immigrants Living In The U.S. — The Pew Research Center estimates the unauthorized immigrant population in the United States at 10.5m, below its peak of 12.2m and lower than every year from 2005 to 2015. That figure represents about 3% of the total U.S. population and 22% of the foreign-born population, shares among the lowest since the 1990s.

AI Summary. Mexico has overtaken China as America's largest source of goods imports, and China's share of US imports has fallen by a third to about 14% since 2017 by American figures. But Chinese data and a 32% rise in China's intermediate-goods exports suggest countries like India and Vietnam repackage Chinese inputs for America.

Mike Bird and Callum Williams The Economist
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.@Birdyword @econcallum argue rumors of Sino-US economic decoupling are overstated citing a rise in China’s exports of intermediate goods and discrepancies between the two countries’ trade data.

Has America actually reduced its reliance on Chinese goods?

Core argument: China's share of American goods imports has fallen by a third since 2017 to about 14% by American figures, and Mexico overtook China last year as the largest source of American goods imports.

Last year Mexico overtook China as America’s largest source of goods imports. Since 2017 the share of America’s imports coming from China has fallen by a third to around 14%, according to American figures. China reports that its exports to America rose by $30bn between 2020 and 2023, whereas America says its Chinese imports fell by $100bn. If China’s data are correct, the country’s share of American imports has still declined, but by much less. Adam Wolfe of Absolute Strategy Research estimates that, as a consequence [of under-reporting to avoid tariffs] America now understates its imports from China by 20-25%. Since 2019 China’s global exports of intermediate goods have risen by 32%, compared with a rise in other sorts of exports, such as finished goods, of only 2%. The surge is driven by exports to countries such as India and Vietnam, which are two of the American government’s preferred trading partners. American trade with these countries is, in turn, increasing—from 4.1% of its goods imports in 2017 to 6.4% today. In combination, these trends imply that the two countries often act as something akin to packaging hubs for goods made with Chinese input that are destined for America’s shores.

Takeaways by Macro Roundup® AI

  1. China's share of American goods imports has fallen by a third since 2017 to about 14% by American figures, and Mexico overtook China last year as the largest source of American goods imports.
  2. China reports its exports to America rose $30bn between 2020 and 2023 while America reports its Chinese imports fell $100bn; Adam Wolfe of Absolute Strategy Research estimates America understates its imports from China by 20-25%.
  3. China's global exports of intermediate goods have risen 32% since 2019 against 2% for other exports, driven by shipments to countries such as India and Vietnam, whose share of American goods imports rose from 4.1% in 2017 to 6.4%.

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.
  • Setser On Sources Of Chinese Demand — China cannot build a developing-world trading bloc to replace the US and Europe as a source of end demand, because its trade surplus is too large and the main deficit countries outside the West are India and Turkey. India resists larger deficits with China, and Turkey needs to reduce its deficit.
  • Can Trade Intervention Lead to Freer Trade? — China accounts for over 31% of global manufacturing but under 13% of global consumption, while the United States accounts for under 17% of manufacturing and nearly 27% of consumption. The author argues persistent surpluses reflect household subsidies to producers, and that the US could counter them with tariffs or taxes on capital inflows.

AI Summary. Battery-electric vehicles rose from 10% to 14% of European motor vehicle sales, and China's share of the region's battery-electric sales rose from 17% to 28%, doubling China's share of total European vehicle sales from 2% to 4%. Those gains may flatten as European producers catch up and political pressure builds to cap Chinese exports.

Thomas Klitgaard Federal Reserve Bank of New York
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China’s success in EVs might lead to only limited GDP gains given likely US and EU protectionist responses to foreign competition in the automotive sector. @NewYorkFed

Is China's share of European electric vehicle sales rising?

Core argument: Battery-electric vehicle sales in Europe rose from 1.2 million in 2021 to 1.6 million in 2022, per the European Automobile Manufacturers Association, while total motor vehicle sales fell from 11.8 million to 11.3 million.

The European Automobile Manufacturers Association estimates that BEV sales in Europe equaled 1.2 million in 2021 and 1.6 million in 2022, with total sales of motor vehicles dipping from 11.8 million to 11.3 million. Given the rising popularity of BEVs (increasing from 10% to 14% of the market) and China’s higher share of that region’s BEV sales (17% to 28%), a quick calculation shows that China’s BEV share of total vehicle sales doubled from 2% to 4% in one year. Assuming that China’s exports to Europe grew at the same rate as its total BEV exports, then Chinese vehicles made up 35% of Europe’s higher BEV sales in 2023, accounting for 5.5% of total motor vehicle sales in the region. Such gains may soon flatten out, both from greater competition as European plants work to catch up and from political pressure to put a cap on China’s exports. China itself is a case study of a government protecting a favored domestic industry, with the U.S.-Japan Voluntary Export Restraint (VER) program in the early 1980s being another.

Takeaways by Macro Roundup® AI

  1. Battery-electric vehicle sales in Europe rose from 1.2 million in 2021 to 1.6 million in 2022, per the European Automobile Manufacturers Association, while total motor vehicle sales fell from 11.8 million to 11.3 million.
  2. China's share of Europe's BEV sales climbed from 17% to 28% as BEVs grew from 10% to 14% of the market, doubling China's share of total European vehicle sales from 2% to 4% in one year.
  3. Assuming China's exports to Europe grew at the same rate as its total BEV exports, Chinese vehicles made up 35% of Europe's BEV sales in 2023 and 5.5% of total motor vehicle sales, gains that may flatten amid European competition and political pressure to cap exports.

Related Articles:

  • US Warns China Against Dumping Goods on Global Markets — The US has warned China that it and its allies will respond if Beijing addresses its industrial overcapacity by dumping goods on international markets. US Treasury officials say Chinese industrial support and macroeconomic policies focused on supply rather than demand risk pushing excess capacity onto world markets.
  • Can Trade Intervention Lead to Freer Trade? — China accounts for over 31% of global manufacturing but under 13% of global consumption, while the United States accounts for under 17% of manufacturing and nearly 27% of consumption. The author argues persistent surpluses reflect household subsidies to producers, and that the US could counter them with tariffs or taxes on capital inflows.
  • A Second Dose of Trump On Trade Would Differ From The First — A second Trump administration would pair a 10 percentage point tariff increase on all US trading partners with a tariff of at least 60% on Chinese imports, with advisers arguing a broad import tax addresses America's persistent pattern of trade deficits rather than bilateral imbalances. Researchers estimate China's manufacturing goods surplus reached a record of almost 2% of world GDP.

AI Summary. A reanalysis argues that the reported long-run decline in the disruptiveness of scientific papers and patents, measured by CD indices, is attributable to a relative decline in database entries recorded as having zero references. The authors find these entries are dataset artifacts, since their source documents do contain references, and that random citation behaviour reproduces the observed decline.

Vincent Holst, Andres Algaba, Floriano Tori, Sylvia Wenmackers and Vincent Ginis Working Paper
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Science is not getting less disruptive over time; an earlier finding that the pace of disruptiveness has slowed was the result of data errors.

Is the reported decline in scientific disruptiveness a data artifact?

Core argument: A reanalysis attributes Park's reported decline in scientific disruptiveness, based on CD indices across almost 45 million papers and 3.9 million patents, to a relative decline in database entries with zero references.

Park reported a decline in the disruptiveness of scientific and technological knowledge over time. Their main finding is based on the computation of CD indices, a measure of disruption in citation networks, across almost 45 million papers and 3.9 million patents. Due to a factual plotting mistake, database entries with zero references were omitted in the CD index distributions, hiding a large number of outliers with a maximum CD index of one [most disruptive], while keeping them in the analysis. Our reanalysis shows that the reported decline in disruptiveness can be attributed to a relative decline of these database entries with zero references. Proper evaluation of the Monte-Carlo simulations reveals that, because of the preservation of the hidden outliers, even random citation behaviour replicates the observed decline in disruptiveness. Finally, while these papers and patents with supposedly zero references are the hidden drivers of the reported decline, their source documents predominantly do make references, exposing them as pure dataset artifacts.

Takeaways by Macro Roundup® AI

  1. A reanalysis attributes Park's reported decline in scientific disruptiveness, based on CD indices across almost 45 million papers and 3.9 million patents, to a relative decline in database entries with zero references.
  2. A plotting mistake omitted zero-reference database entries from the CD index distributions while retaining them in the analysis, hiding a large number of outliers with a maximum CD index of one.
  3. Because the hidden outliers were preserved, even random citation behaviour replicates the observed decline in disruptiveness in the Monte-Carlo simulations, and the source documents of the supposedly zero-reference papers and patents predominantly do make references.

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