Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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 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


Monday, April 15, 2024

AI Summary. Linking census records of sheltered and unsheltered homeless adults to tax and benefit data, the authors find nearly half had formal employment while homeless and nearly all worked or received at least one safety net program, yet incomes stayed low across the surrounding decade, suggesting homelessness arises amid long-term deprivation rather than sudden income loss.

Bruce Meyer, Angela Wyse, Gillian Meyer, Alexa Grunwaldt and Derek Wu National Bureau of Economic Research
Date Posted:
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In a sample of ~140k homeless people, Meyer et al found that 40-50% aged 25-59 had earnings of $12-14k in 2018 dollars and 80%+ had benefits from SSI and related programs. For those with low permanent income, even modest events trigger homelessness.

Does homelessness stem from long-term poverty rather than sudden income loss?

Core argument: Nearly half of adults recorded as sheltered or unsheltered homeless in the 2010 Census had formal employment in the year they were observed as homeless, and nearly all either worked or were reached by at least one safety net program.

Starting from the first large and nationally representative sample of adults recorded as sheltered and unsheltered homeless taken from the 2010 Census, we link restricted-use longitudinal tax records and administrative data on the Supplemental Nutrition Assistance Program (SNAP), Medicare, Medicaid, Disability Insurance (DI), Supplemental Security Income (SSI), veterans’ benefits, housing assistance, and mortality. Nearly half of these adults had formal employment in the year they were observed as homeless, and nearly all either worked or were reached by at least one safety net program. Nevertheless, their incomes remained low for the decade surrounding an observed period of homelessness, suggesting that homelessness tends to arise in the context of long-term, severe deprivation rather than large and sudden losses of income. People appear to experience homelessness because they are very poor despite being connected to the labor market and safety net, with low permanent incomes leaving them vulnerable to the loss of housing when met with even modest disruptions to life circumstances.

Takeaways by Macro Roundup® AI

  1. Nearly half of adults recorded as sheltered or unsheltered homeless in the 2010 Census had formal employment in the year they were observed as homeless, and nearly all either worked or were reached by at least one safety net program.
  2. Incomes of adults observed as homeless in the 2010 Census remained low across the decade surrounding that period, suggesting homelessness arises amid long-term, severe deprivation rather than large and sudden income losses.
  3. The study links the first large, nationally representative sample of homeless adults to restricted-use longitudinal tax records and administrative data on SNAP, Medicare, Medicaid, Disability Insurance, SSI, veterans' benefits, housing assistance, and mortality.

Related Articles:

  • Evaluating the Success of the War on Poverty since 1963 Using an Absolute Full-Income Poverty Measure — The authors estimate that an absolute full-income poverty measure, which counts a fuller set of income sources and adjusts thresholds only for inflation, fell from 19.5% to 1.6%, versus an official decline to 10.5%. They also find relative poverty reductions modest and government dependence more than doubled among working-age adults.
  • More Americans Are Ending Up Homeless—at a Record Rate — Homelessness counts across more than 300 U.S. tracking entities are up roughly 11% from the prior year, which would be the largest recorded increase since comparable federal tracking began in 2007. Advocates for the homeless say high housing costs remain the biggest driver, taking a heavier toll as pandemic-era relief spending and eviction moratoriums wind down.

AI Summary. California has lost tech jobs across computer systems design, streaming and social networks, software publishing, and web search, and its share of US tech industry jobs has fallen to the lowest level in more than a decade after peaking near 19% in late 2019. California still receives 31% of the industry's total compensation.

Joseph Politano Apricitas Economics
Date Posted:

California’s share of US tech jobs is the lowest in a decade, falling from nearly 19% in late 2019 to just over 16% in February. Californians maintain an advantage in high-end jobs, earning 31% of the industry’s total compensation. @JosephPolitano

Is California losing its share of US tech jobs?

Core argument: California has lost 21k jobs in computer systems design, 15k in streaming and social networks, 11k in software publishing, and 7k in web search since August 2022, while gaining under 1k in computing infrastructure and data processing.

Since August 2022 California has lost 21k jobs in computer systems design, 15k in streaming and social networks, 11k in software publishing, and 7k in web search—while gaining less than 1k in computing infrastructure and data processing. As a result, the share of US tech jobs located in California has fallen significantly since 2020, dropping a full percentage point over the last year and hitting the lowest levels in more than a decade. California had gone from having less than 15% of all US tech industry jobs in 2010 to nearly 19% in late 2019, but the pandemic and ensuing remote work shock immediately reversed that trend. Despite losing significant amounts of tech jobs to other states, California still retains a massive advantage at the high end of the industry: Californians receive a whopping 31% of the industry’s total compensation.

Takeaways by Macro Roundup® AI

  1. California has lost 21k jobs in computer systems design, 15k in streaming and social networks, 11k in software publishing, and 7k in web search since August 2022, while gaining under 1k in computing infrastructure and data processing.
  2. California's share of US tech industry jobs has fallen a full percentage point over the past year to its lowest level in more than a decade, after rising from under 15% in 2010 to nearly 19% in late 2019 before the pandemic and remote work reversed the trend.
  3. Californians receive 31% of the US tech industry's total compensation, an advantage at the high end of the industry that persists despite job losses to other states.

Related Articles:

  • California Mints Millionaires Faster Than They Can Leave — The number of California residents with incomes of $1m or more grew by 61,900, or 66%, from 2019 to 2021, lifting the state's share of US millionaires to 17.9% from 17% while the shares of New York, Texas, and Florida fell. Rising in-state incomes minted more new millionaires than the net outflow of higher-earning taxpayers to other states.
  • Behavioral Responses to State Income Taxation of High Earners: Evidence from California — A California ballot measure raising top marginal income tax rates by up to 3 percentage points prompted an additional 0.8% of the affected tax base to leave the state, with an estimated income elasticity of 2.5–3.2 for high earners who stayed. The authors estimate these responses eroded 45.2% of windfall revenues within one year and 60.9% within two.
  • The Ultra-Rich Are Flourishing and Sticking Around In California — California is home to 113 billionaires, more than any country except China, and added over 116,000 millionaire taxpayers between the end of 2019 and 2021, according to the state's Department of Finance. The number of residents reporting income above $50m rose 158% to 3,182.

AI Summary. Japan's population of Japanese nationals fell by 837,000 over a year, the largest annual decline since comparable records began in 1950, while the overall population, buoyed by rising numbers of foreign residents, fell by 595,000 to 124.3mn. The number of foreign nationals living in Japan reached a record 3.2mn.

Leo Lewis Financial Times
Date Posted:

Japan’s native population fell by 837,000 in 2023, almost 100 people an hour. Some of the decline was offset by immigration for a net change of 595,000. Japan’s foreign population reached a record high of 3.2mm in June 2023.

Is rising foreign residency offsetting Japan's declining native population?

Core argument: Japan's population of Japanese nationals fell by 837,000 in the 12 months to October 1, 2023, the largest annual drop since comparable records began in 1950, equal to 2,293 people per day or just under 96 per hour.

The number of Japanese nationals dropped by the biggest amount in a year since comparable records began in 1950 — a fall of 837,000 in the 12 months to October 1, 2023. That decline represents a daily drop of 2,293 people or just under 96 per hour. Japan’s overall population was 124.3mn in October — down 595,000 from the previous year when adjusted for steadily rising levels of migrant workers, overseas students, and foreign permanent residents. In a report released last year, the country’s Immigration Services Agency said the number of foreign nationals living in Japan had reached a record high of 3.2mn at the end of June 2023. The increase was driven by expansion in a visa programme for skilled workers in specified sectors and in technical internships.

Takeaways by Macro Roundup® AI

  1. Japan's population of Japanese nationals fell by 837,000 in the 12 months to October 1, 2023, the largest annual drop since comparable records began in 1950, equal to 2,293 people per day or just under 96 per hour.
  2. Japan's overall population stood at 124.3mn in October, down 595,000 from a year earlier when adjusted for rising numbers of migrant workers, overseas students, and foreign permanent residents.
  3. Japan's Immigration Services Agency reported that foreign nationals living in Japan reached a record 3.2mn at the end of June 2023, an increase driven by expansion of a visa programme for skilled workers in specified sectors and in technical internships.

Related Articles:

  • Where Can Investors Find Geographic Diversification Today? — Japan offers investors geographic diversification, with among the lowest correlation in economic conditions to the US of any developed country, reflecting trade exposure split between the US, China, and the broader Asia region. Most sales of Japanese-listed companies are domestic, and investors remain underweight Japanese assets.
  • Japanese Workers Secure Biggest Pay Rise In Three Decades — Japanese companies including Honda, Nippon Steel, and ANA Holdings granted workers their largest pay rise in more than three decades, with economists expecting large firms to give unionised workers average increases above 4%, up from 3.6% the prior year. The increases strengthen the case for the Bank of Japan to begin raising interest rates.
  • Japan’s Foreign Worker Tally Tops Two Million For First Time — Japan's foreign worker count reached about 2.05 million, the most on record, a 12.4% increase from a year earlier, according to the Labor Ministry. About three in five of the roughly 319,000 establishments employing non-Japanese staff have no more than 30 employees in total.

AI Summary. About 70% of US mortgage holders hold rates more than three percentage points below what a new loan would cost, compared with a 1998–2020 period in which no more than 40% had rates even one point below market. Economists at the Federal Housing Finance Agency estimate this lock-in effect accounts for roughly 1.3m fewer home sales.

Emily Badger and Francesca Paris New York Times
Date Posted:

70% of American mortgage holders have a rate more than 3pp below the current market rate; the Federal Housing Finance Agency estimates this lock-in effect is responsible for about 1.3mm fewer home sales from the spring of 2022 through 2023.

How many home sales have low locked-in mortgage rates prevented?

Core argument: Economists at the Federal Housing Finance Agency estimate the mortgage lock-in effect accounts for about 1.3 million fewer U.S. home sales from spring 2022 through the end of 2023, against roughly five million annual sales in more normal times.

Between 1998 and 2020, there was never a time when more than 40% of American mortgage holders had locked-in rates more than one percentage point below market conditions. By the end of 2023 about 70% of all mortgage holders had rates more than three percentage points below what the market would offer them if they tried to take out a new loan. Indeed, according to new research from economists at the Federal Housing Finance Agency, this lock-in effect is responsible for about 1.3 million fewer home sales in America during the run-up in rates from the spring of 2022 through the end of 2023. That’s a startling number in a nation where around five million homes sell annually in more normal times — most of those to people who already own.

Takeaways by Macro Roundup® AI

  1. Economists at the Federal Housing Finance Agency estimate the mortgage lock-in effect accounts for about 1.3 million fewer U.S. home sales from spring 2022 through the end of 2023, against roughly five million annual sales in more normal times.
  2. By the end of 2023, about 70% of all U.S. mortgage holders had rates more than three percentage points below what the market would offer them on a new loan.
  3. Between 1998 and 2020, the share of American mortgage holders with rates more than one percentage point below market conditions never exceeded 40%.

Related Articles:

  • The Lock-In Effect of Rising Mortgage Rates — The authors estimate that each percentage point by which market mortgage rates exceed a homeowner's original rate lowers the probability of sale by 18.1%, an effect they calculate prevented 1.33m US home sales. They estimate this supply reduction raised home prices by 5.7%, outweighing a 3.3% price decline from higher rates.
  • The Boomer-Millennial Housing Battle Cools — Demographic needs are outweighing affordability in the housing market, with the share of first-time buyers returning nearly to pre-pandemic levels despite high prices and interest rates. One in four Millennial buyers reported purchasing because they had no choice, and Millennials again make up the largest group of homebuyers.
  • On The Move: West Side Story — The West's share of US population has flattened and appears to be falling, with relative housing affordability cited as a key part of the story. Metropolitan areas with median mortgage payments above the US average generally show negative or weakly positive population growth, and Pacific-state metros all have above-average mortgage payments.

AI Summary. Homicides fell about 20% across 133 U.S. cities in the first three months of the year compared with the same period a year earlier, according to tabulations of police department data by a crime-data analyst, with declines of 35% in Philadelphia, 15% in New York City, and 58% in Columbus, Ohio.

Dan Frosch and Cameron McWhirter Wall Street Journal
Date Posted:

Homicides in American cities are approaching the pre-pandemic level, dropping 20% y/y in 2023.

Are homicides falling sharply across American cities?

Core argument: Homicides fell about 20% across 133 U.S. cities from the start of the year through the end of March compared with the same period in 2023, according to crime-data analyst Jeff Asher's tabulation of police department statistics.

Nationwide, homicides dropped around 20% in 133 cities from the beginning of the year through the end of March compared with the same period in 2023, according to crime-data analyst Jeff Asher, who tabulated statistics from police departments across the country. Philadelphia saw a 35% drop in killings as of April 12 compared with the same period last year, police data show. In New York City, homicides fell 15% through April 7. Homicides in Columbus, Ohio, plunged 58% through April 7. During the pandemic, homicide rates shot up around the country, sparking concerns that the progress made during a decadeslong drop in violent crimes had been undone. The number of homicides in the U.S. rose nearly 30% in 2020 from the prior year to 21,570, the largest single-year increase ever recorded by the Federal Bureau of Investigation.

Takeaways by Macro Roundup® AI

  1. Homicides fell about 20% across 133 U.S. cities from the start of the year through the end of March compared with the same period in 2023, according to crime-data analyst Jeff Asher's tabulation of police department statistics.
  2. Philadelphia recorded a 35% drop in killings as of April 12 versus the same period a year earlier, while New York City homicides fell 15% through April 7 and Columbus, Ohio, homicides dropped 58% through April 7.
  3. U.S. homicides rose nearly 30% in 2020 from the prior year to 21,570, the largest single-year increase recorded by the FBI, sparking concerns that a decadeslong decline in violent crime had been undone.

Related Articles:

  • Punching TikToks Are Part of a Real New York Crime Wave — Felony assaults in New York City's subway have risen two- to threefold since the pandemic, a pattern that does not match the rest of the country and appears connected to local criminal justice practices. Research finds that ending cash bail for most misdemeanors and nonviolent felonies is associated with increased repeat offending among those previously charged with violent felonies.
  • The Collapse of Broken-Windows Policing in New York City, Los Angeles, and Washington, DC, 2013–22 — Arrests for minor "broken-windows" offenses—counted as misdemeanors, violations, and infractions per 100,000 residents—fell 74% in New York, 77% in Washington, DC, and 81% in Los Angeles over the period studied, declining steadily in New York and Los Angeles.
  • Pandemic Murder Wave Has Crested. Here’s the Postmortem — Murders in 93 US cities fell 5% year over year after the increase that began in 2020, though homicides remained 4,764 (28.7%) above pre-pandemic levels, according to data compiled by AH Datalytics. US murder rates remain far higher than in other wealthy nations.

AI Summary. Around $90tn in the US is projected to pass from those born before 1964 to their heirs by 2045, according to research by Cerulli Associates. With government finances strained by pandemic costs and aging populations, debate is growing over whether inheritance taxes—long avoidable through planning—should be made harder to sidestep.

Emma Agyemang Financial Times
Date Posted:

Over the next 20 years, $90T in wealth will be transferred from Americans born before 1964 to their heirs according to financial research firm Cerulli Associates.

Should governments make inheritance taxes harder to avoid?

Core argument: Cerulli Associates research projects roughly $90tn will pass from Americans born before 1964 to their heirs by 2045.

Roy Jenkins, a former UK finance minister and EU Commission president, once described inheritance tax as a “voluntary levy,” paid only by those who distrust their heirs more than they dislike the tax authorities. But as baby boomer wealth starts to trickle down to younger cohorts, and with government coffers around the world strained by the costs of the pandemic and aging populations, debate is growing about whether it should become, at the very least, less voluntary. By 2045, around $90tn in the US alone is set to be transferred from those born before 1964 to their heirs, according to research by Cerulli Associates.

Takeaways by Macro Roundup® AI

  1. Cerulli Associates research projects roughly $90tn will pass from Americans born before 1964 to their heirs by 2045.
  2. Roy Jenkins, a former UK finance minister and EU Commission president, called inheritance tax a "voluntary levy," paid only by those who distrust their heirs more than they dislike the tax authorities.
  3. Debate over making inheritance taxation less voluntary is growing as government finances worldwide are strained by pandemic costs and aging populations.

Related Articles:

Tuesday, April 16, 2024

AI Summary. Survey-based estimates show the share of US businesses using artificial intelligence for business purposes rose from 3.7% to 5.4%, with use expected to reach about 6.6%. Users often apply AI to substitute for worker tasks and equipment or software, but few report employment reductions from AI use.

Kathryn Bonney, Cory Breaux, Cathy Buffington, Emin Dinlersoz, Lucia Foster, Nathan Goldschlag, John Haltiwanger, Zachary Kroff and Keith Savage National Bureau of Economic Research
Date Posted:
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Based on a Dept. of Commerce survey of 1.2mm US businesses, only 6.6% of firms, representing 12% of employees, plan to use AI by Fall 2024. In the Information sector, 21.5% of firms with 25% of employees plan to use AI. @JHaltiwanger_UM

How widely are US businesses adopting AI, and with what employment effects?

Core argument: Bi-weekly business AI use rose from 3.7% to 5.4% between September 2023 and February 2024 in the Business Trends and Outlook Survey, with an expected rate of about 6.6% by early fall 2024.

We provide new, real-time estimates of current and expected future use of AI for business purposes based on the Business Trends and Outlook Survey for September 2023 to February 2024. During this period, bi-weekly estimates of AI use rate rose from 3.7% to 5.4%, with an expected rate of about 6.6% by early Fall 2024. The fraction of workers at businesses that use AI is higher, especially for large businesses and in the Information sector. AI users often utilize AI to substitute for worker tasks and equipment/software, but few report reductions in employment due to AI use. Common uses of AI include marketing automation, virtual agents, and data/text analytics. Many businesses do not yet see AI as being relevant for their business activity or do not yet have the knowledge to implement AI in their business activity.

Takeaways by Macro Roundup® AI

  1. Bi-weekly business AI use rose from 3.7% to 5.4% between September 2023 and February 2024 in the Business Trends and Outlook Survey, with an expected rate of about 6.6% by early fall 2024.
  2. The fraction of workers at businesses using AI exceeds the fraction of businesses using AI, especially for large businesses and in the Information sector, with marketing automation, virtual agents, and data/text analytics among common applications.
  3. AI users often apply AI to substitute for worker tasks and equipment or software, but few report employment reductions from AI use, while many businesses report AI is not yet relevant to their activity or that they lack the knowledge to implement it.

Related Articles:

  • The AI Transition One Year Later: On Track, but Macro Impact Still Several Years Off — Investment in AI hardware is projected to rise substantially as a precursor to integrating AI into business processes, with the investment cycle estimated to peak at 2–2½% of GDP and early signs visible among AI-enabling companies. The authors estimate generative AI could raise developed-market labor productivity growth by 1.5pp annually over a 10-year adoption period, roughly 15% cumulatively.
  • Assessing the Implications of a Productivity Miracle — If artificial intelligence can perform economically valuable cognitive tasks at very low marginal cost, consumers would buy far more of the cheapened goods and spend the savings in other categories, expanding activity and employment in sectors facing new demand. Where supply is inherently limited, such as real estate, those savings could bid up prices and produce inflation.
  • The Good, the Bad and the Ugly — Dominion Energy, which serves 6m customers, has raised its projected power needs for the coming decade, attributing the change to data center demand. McKinsey, BCG, and S&P Global all expect US power demand to grow 13%-15% annually through 2030, and rising transformer costs alongside electrification could make electricity scarcer.

AI Summary. Business investment in OECD economies fell after 2008, standing about 40% below its pre-crisis trend by 2021, and the analysis attributes roughly half of that shortfall to weaker economic activity. Firm-level estimates find that a 10–30% average decline in firms' future productivity and profitability expectations accounts for most of the explained drop in investment.

IMF Staff International Monetary Fund
Date Posted:
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In advanced economies, private capital formation remains 40% below its pre-crisis trend, with slower economic growth explaining about half the decline.

Why has business investment fallen below its pre-crisis trend?

Core argument: Business investment in OECD economies, the bulk of total investment, fell after 2008 and in 2021 declined by about 40% of its pre-global-financial-crisis trend.

In OECD economies, business investment—the bulk of total investment—tumbled after 2008, and in 2021 it fell by about 40% of its pre-global-financial-crisis trend. For every 1pp decline in output growth that is not triggered by a contraction in business investment, there is a corresponding 2pp decrease in investment growth. This estimated output-investment relationship is used to calculate the investment shortfall from the growth slowdown following the global financial crisis. Comparing with the precrisis trend, Figure 3.8 suggests that as of 2021, about half of the shortfall in business investment since 2008 can be linked to weaker economic activity. [In a separate firm-level analysis of investments by public companies,] since 2008, Tobin’s q, an indicator of firms’ future productivity and profitability expectations, has decreased by 10 to 30% on average, contributing to the bulk of the explained decline in investment in both advanced and emerging market economies.

Takeaways by Macro Roundup® AI

  1. Business investment in OECD economies, the bulk of total investment, fell after 2008 and in 2021 declined by about 40% of its pre-global-financial-crisis trend.
  2. Each 1pp decline in output growth not triggered by a contraction in business investment corresponds to a 2pp decrease in investment growth, an estimated relationship implying about half of the business investment shortfall since 2008 is linked to weaker economic activity as of 2021.
  3. Tobin's q, an indicator of firms' future productivity and profitability expectations, has declined by 10–30% on average since 2008 in a firm-level analysis of public companies, contributing the bulk of the explained investment decline in both advanced and emerging market economies.

Related Articles:

  • US Manufacturers to Temper Investment Pace After Vibrant 2023 — US manufacturers' investment in plants and production facilities rose almost 63% in a year, the largest annual advance since 1951, reflecting federal incentives and spending deferred during the pandemic. Purchasing and supply executives expect outlays to increase almost 12% this year after rising nearly 15%.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.
  • The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends? — Total factor productivity is the main factor accounting for differences in labor productivity growth across countries and over time, and its growth has been lackluster across large advanced economies since the mid-2000s. The authors find this slowdown appears in both manufacturing and market services, with U.S. productivity growth slowing before the Great Recession.

AI Summary. Smartphone location data for over 2m Americans indicate that 73% enter a place of worship at least once a year but only 5% attend weekly, far below the roughly 22% who report weekly attendance in surveys. Frequent attenders are less likely to visit strip clubs, liquor stores, and casinos.

Devin Pope National Bureau of Economic Research
Date Posted:
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Geolocation data from cell phones shows that less than 5% of Americans attend weekly religious services, versus 22% who report they do. @Devin_G_Pope

Do Americans attend religious services as often as they say?

Core argument: Smartphone geodata for over 2 million Americans in 2019 show only 5% attend religious services weekly, far below the roughly 22% who report weekly attendance in surveys.

I provide a descriptive analysis of religious worship attendance using geodata from smartphones for over 2 million Americans in 2019. I establish several key findings. First, 73% of people step into a religious place of worship at least once during the year on the primary day of worship. However, only 5% of Americans attend services “weekly”, far fewer than the ~22% who report to do so in surveys. The number of occasional vs. frequent attenders varies substantially by religion. I estimate that approximately 45M Americans attend worship services in a typical week of the year, but with large changes around Holidays (e.g. Easter). The intensity of religious observance correlates with a host of other activities. For example, relative to non-attenders and infrequent attenders, frequent religious attenders are less likely to go to strip clubs, liquor stores, and casinos.

Takeaways by Macro Roundup® AI

  1. Smartphone geodata for over 2 million Americans in 2019 show only 5% attend religious services weekly, far below the roughly 22% who report weekly attendance in surveys.
  2. 73% of people step into a religious place of worship at least once during the year on the primary day of worship, with the mix of occasional versus frequent attenders varying substantially by religion.
  3. An estimated 45 million Americans attend worship services in a typical week, with large changes around holidays such as Easter, and frequent attenders are less likely than non-attenders and infrequent attenders to visit strip clubs, liquor stores, and casinos.

Related Articles:

  • Most U.S. Parents Pass Along Their Religion and Politics to Their Children — Survey data show most U.S. teens share their parents' politics and religion: 81% of Republican or Republican-leaning parents had teens identifying the same way, as did 89% of Democratic or Democratic-leaning parents. Similar alignment held for religion, with 82% of Protestant parents, 81% of Catholic parents, and 86% of religiously unaffiliated parents having teens who identified likewise.
  • Religious ‘Nones’ in America: Who They Are and What They Believe — Pew survey data indicate about 28% of U.S. adults are religiously unaffiliated, identifying as atheist, agnostic, or "nothing in particular." Most of these adults believe in God or a higher power, rarely attend religious services, say religion does some harm while many also see some good, and reject the idea that science can explain everything.
  • Opiates of the Masses? Deaths of Despair and the Decline of American Religion — The authors estimate that declines in religious attendance following repeals of laws restricting Sunday commerce explain an important part of the initial increase in middle-aged "deaths of despair" from suicide, liver disease, and poisoning. The effect appears driven by falling formal religious participation rather than by changes in belief or private activities such as prayer.

AI Summary. Tax season is unlikely to move markets meaningfully because cash held by banks and money market funds remains abundant. Asset sales to fund tax bills are spread over time and small relative to market size, though tax-date declines in bank reserves and money fund assets have occasionally pushed money market rates up briefly.

Joseph Wang Fed Guy Blog
Date Posted:

This year, the April tax drain, a shift of hundreds of billions of dollars from banks and money market funds to the Treasury’s General Account should be uneventful “because cash remains plentiful.” @FedGuy12

Does tax season meaningfully move markets when cash is abundant?

Core argument: April tax season is unlikely to move markets in 2024 because high reverse repo (RRP) and bank reserve balances indicate an abundance of cash in the financial system.

Tax season is unlikely to have a meaningful impact on markets in 2024 because cash remains plentiful. While taxpayers can sell equities and other assets to finance their tax bill, those sales occur over a period of time and are small relative to the size of asset markets. But the decline in bank reserves and MMF assets around tax date is discrete and a steep decline in cash holdings of the private sector. This has occasionally led to some degree of upward pressure in money markets, as there is literally less cash in the space. In 2019, the RRP was empty and MMFs and banks were active lenders in the repo market. April tax season coincided with upward pressure in repo rates that then dissipated in a few days. The high RRP and reserve balances today indicates an abundance of cash and suggests an uneventful tax season.

Takeaways by Macro Roundup® AI

  1. April tax season is unlikely to move markets in 2024 because high reverse repo (RRP) and bank reserve balances indicate an abundance of cash in the financial system.
  2. Taxpayer sales of equities and other assets to fund tax bills are spread over time and small relative to asset market size, while the tax-date drop in bank reserves and money market fund assets is discrete and steep.
  3. In 2019, with the RRP empty and money market funds and banks lending actively in repo, April tax season coincided with upward pressure in repo rates that dissipated within a few days.

Related Articles:

  • Neutralizing QT — 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.
  • 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.