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


Thursday, April 25, 2024

AI Summary. Living in an area with more college graduates is associated with lower mortality even after accounting for individuals' own education, and more than half of that correlation can be explained by area differences in smoking and obesity rates. The authors find evidence for both regulatory policies such as workplace smoking bans and peer effects about the harms of smoking.

Jacob Bor, David Cutler, Edward Glaeser and Ljubica Ristovska National Bureau of Economic Research
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Bor, @Cutler_econ, Glaeser, and @lj_ristovska find a strong negative correlation between the % of college graduates in an area and all-cause mortality, even after controlling for individual education.

Does living around college graduates lengthen life?

Core argument: The authors find a strong, robust relationship between area human capital and mortality that persists after controlling for individual education, with more than half the correlation explained by differences in smoking and obesity rates across areas.

[There is] a strong and robust relationship between area human capital and mortality, even after controlling for individual education. More than half of the correlation between area human capital and mortality can be explained by differences in smoking rates and obesity rates across areas, and that [these effects are] strong even after controlling for individual education. More than half of the correlation between area human capital and mortality can be explained by differences in smoking rates and obesity rates across areas. We find empirical evidence for [both] regulatory policies such as workplace smoking bans, and peer effects about the harms of smoking. Health-related behaviors are particularly sensitive to human capital spillovers among younger individuals, implicating the role of changing social norms around smoking and obesity across generations in the widening geographic gaps in health between high and low human capital areas.

Takeaways by Macro Roundup® AI

  1. The authors find a strong, robust relationship between area human capital and mortality that persists after controlling for individual education, with more than half the correlation explained by differences in smoking and obesity rates across areas.
  2. The authors find empirical evidence for both regulatory policies, such as workplace smoking bans, and peer effects regarding the harms of smoking.
  3. Health-related behaviors are particularly sensitive to human capital spillovers among younger individuals, implicating changing social norms around smoking and obesity across generations in the widening geographic health gaps between high and low human capital areas.

Related Articles:

  • Comments On: “Accounting For the Widening Mortality Gap Between American Adults With and Without a BA” By Anne Case and Angus Deaton — Selection plausibly accounts for most or all of the widening mortality gap between US adults with and without a bachelor's degree: high school achievement measures have not risen since the early 1970s while the share earning degrees rose, and national youth survey data show non-graduates increasingly negatively selected on aptitude scores.
  • Accounting for the Widening Mortality Gap Between American Adults With and Without a BA — The mortality gap between American adults with and without a four-year college degree widened across three periods—falling mortality for both with larger gains for graduates, then diverging, then rising faster for the less educated during the pandemic—reaching an 8.5-year difference in adult life expectancy. Americans with a degree, treated as a separate country, would rank just below Japan.
  • How Disadvantage Became Deadly in America — The author calculates that the average age of death among the shortest-lived 10% of Americans is 36, versus 55 in the Netherlands and 57 in Sweden, after falling by about eight years over the past decade. Wealthy Americans live equally long regardless of local opioid use and gun violence, while poor Americans in those areas live far shorter lives.

AI Summary. Norway's sovereign wealth fund argues that American companies are outpacing European rivals on innovation and technology because the US more readily accepts failure and risk and because Americans work harder and are more ambitious. US shares now make up almost half of the fund's equity holdings, up from 32% a decade earlier, while UK holdings fell from 15% to 6%.

Richard Milne and Robin Wigglesworth Financial Times
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The CEO of Norway’s $1.6T oil fund notes that US companies have outpaced their European rivals in innovation and technology; “There’s a mindset issue in terms of acceptance of mistakes and risks…the Americans just work harder.”

The CEO of Norway’s $1.6T oil fund notes that US companies have outpaced their European rivals in innovation and...

Why are American companies outpacing European rivals on innovation?

Core argument: US shares account for almost half of Norway's oil fund equities, up from 32% in 2013, while the UK, its leading European holding, fell from 15% of the equity portfolio a decade ago to 6% last year.

Nicolai Tangen noted it's “worrisome” that American companies were outpacing their European rivals on innovation and technology, leading to vast outperformance of US shares in the past decade. “There’s a mindset issue in terms of acceptance of mistakes and risks. You go bust in America, you get another chance. In Europe, you’re dead,” he said, adding that there was also a difference in “the general level of ambition. We are not very ambitious. I should be careful about talking about work-life balance, but the Americans just work harder.” Its US holdings have increased in the past decade while its European ones have declined. US shares account for almost half of all its equities compared with 32% in 2013. The leading European country — the UK — represented 15% of its equity portfolio a decade ago but just 6% last year. The fund is invested in about 9,000 companies worldwide, but seven US technology companies — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — account for about 12% of its equity portfolio.

Takeaways by Macro Roundup® AI

  1. US shares account for almost half of Norway's oil fund equities, up from 32% in 2013, while the UK, its leading European holding, fell from 15% of the equity portfolio a decade ago to 6% last year.
  2. Nicolai Tangen, head of Norway's oil fund, called it "worrisome" that American companies were outpacing European rivals on innovation and technology, which he linked to vast outperformance of US shares over the past decade.
  3. Tangen attributed the gap to a mindset difference on risk and mistakes — "You go bust in America, you get another chance. In Europe, you're dead" — plus a lower European level of ambition and Americans working harder.

Related Articles:

  • Comparing EU-to-US Output Per Hour — European Union output per hour worked has risen from about 72% of the US level in the early 2000s to about 82%. The EU's 28% shortfall in GDP per capita versus the US is roughly two-thirds attributable to lower output per hour and one-third to fewer hours worked; Germany's shortfall reflects fewer hours alone.
  • Europe Has Fallen Behind America and the Gap is Growing — The EU economy was somewhat larger than the US in 2008 ($16.2tn versus $14.7tn), but by 2022 the US had grown to $25tn while the EU and UK combined reached only $19.8tn. The dollar's status as the world's reserve currency allows the US to finance its ambitions without unsettling markets.
  • Europe Regulates Its Way to Last Place — Europe's regulators tend to act on the mere possibility of harm rather than evidence of it, an approach that can throttle innovation early. The McKinsey Global Institute found that among companies with over $1bn in revenue, U.S. firms spent 80% more on research and development, had 30% higher return on capital, and grew revenue 1.3 percentage points faster.

AI Summary. The U.S. total fertility rate fell 2% to 1.62 births per woman, the lowest since federal tracking began in the 1930s, with about 3.59mn births — the fewest since 1979 — according to provisional data. Birth rates for women aged 35-39, at 54.7 per 1,000, were close to the rate of 55.4 per 1,000 for women aged 20-24.

Jennifer Calfas and Anthony DeBarros Wall Street Journal
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3.59mm children were born in the US in 2023, down 2% from 2022, as the US total fertility rate fell to 1.6 births/woman, the lowest level on record.

How low has the U.S. fertility rate fallen?

Core argument: The U.S. total fertility rate fell 2% to 1.62 births per woman in 2023, the lowest since the government began tracking it in the 1930s, according to provisional data.

The total fertility rate fell to 1.62 births per woman in 2023, a 2% decline from a year earlier. It is the lowest rate recorded since the government began tracking it in the 1930s. Total fertility estimates the number of children a woman would give birth to in her lifetime. The number of births last year was the lowest since 1979, according to provisional data. About 3.59 million children were born in the U.S. in 2023, a 2% drop compared with 3.66 million in 2022. Women in their mid-to-late 30s are having children at similar rates to those in their early to mid-20s. Birthrates for women 35-39 fell to 54.7 births per 1,000 women—closer to the rates for women 20-24, which dropped 4% to 55.4 births per 1,000 women in 2023 The figures are provisional and likely to adjust slightly when final data are released later this year.

Takeaways by Macro Roundup® AI

  1. The U.S. total fertility rate fell 2% to 1.62 births per woman in 2023, the lowest since the government began tracking it in the 1930s, according to provisional data.
  2. About 3.59 million children were born in the U.S. in 2023, down 2% from 3.66 million in 2022 and the lowest number of births since 1979.
  3. Birthrates for women aged 35-39 fell to 54.7 births per 1,000 women in 2023, close to the 55.4 per 1,000 for women aged 20-24, which dropped 4%.

Related Articles:

  • America Is Uniquely Ill-Suited To Handle a Falling Population — U.S. population growth slowed to about 7.4% in the decade to 2020, the slowest since the Great Depression, as the fertility rate fell from above the 2.1 needed for a stable population to 1.67. Because local and regional authorities levy 48% of all U.S. taxes—versus 20% in France and 6% in Britain—shrinking local revenue forces service cuts or tax rises.
  • US Births Are Down Again, After the COVID Baby Bust and Rebound — US births declined steadily for years before the pandemic, with almost 600,000 fewer annual births in 2019 than in 2007, a 13% drop. The pandemic-related baby bust and subsequent rebound were short-term deviations from that longer trend, and 2022 birth counts remained below 2019 levels.
  • Without Immigrants, US Working-Age Population Would Shrink — All net US employment growth since early 2020 has been among foreign-born workers, and without immigration the US working-age population would be shrinking — a pattern likely to persist for the rest of the decade. The jump in immigration appears to be enabling a soft landing that most economists had thought impossible.

AI Summary. Researchers analyzing 22m patient appointments among 18- to 30-year-olds found a sharp jump in permanent contraceptive procedures among both men and women following the US Supreme Court decision ending the federal right to abortion. Monthly tubal ligations rose by 58 per 100,000 women with appointments, with the growth rate accelerating from 2.8 to more than 5 additional procedures per month.

Economist Staff The Economist
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According to a paper in the JAMA Health Forum, permanent contraceptive procedures have increased among both men and women in the aftermath of Dobbs.

Have young Americans increased permanent contraception after abortion rights ended?

Core argument: Tubal ligations among women aged 18–30 rose immediately after the Dobbs decision by 58 procedures per 100,000 women with health-care appointments per month, from a baseline of roughly 250, according to a study in JAMA Health Forum.

In a paper published on April 12th in JAMA Health Forum researchers from the University of Pittsburgh and Boston University analysed data on permanent contraceptive procedures among 18- to 30-year-olds. They looked at 22m instances of patients attending at least one appointment, for either evaluation or treatment, in each month between January 2019 and September 2023. These were mostly at academic medical centres, so government-funded public clinics providing free family-planning services to poor people may not have been adequately represented. The results are nonetheless striking. The study found a sharp jump in permanent contraceptive procedures among both men and women in the months after the Dobbs decision. Before Dobbs, there were around 250 tubal ligations for every 100,000 women with health-care appointments per month. But immediately afterwards that number jumped by 58. In the following months, the growth rate accelerated from its baseline of 2.8 additional procedures per month in the three-and-a-half years leading up to Dobbs to more than five.

Takeaways by Macro Roundup® AI

  1. Tubal ligations among women aged 18–30 rose immediately after the Dobbs decision by 58 procedures per 100,000 women with health-care appointments per month, from a baseline of roughly 250, according to a study in JAMA Health Forum.
  2. Researchers from the University of Pittsburgh and Boston University found the growth rate in tubal ligations accelerated from 2.8 additional procedures per month in the three-and-a-half years before Dobbs to more than five afterwards.
  3. The study analysed 22m instances of patients aged 18–30 attending at least one appointment in each month between January 2019 and September 2023, mostly at academic medical centres, so government-funded public family-planning clinics may not be adequately represented.

Related Articles:

  • Abortions Have Become 6% Rarer Since the End of Roe V Wade — A report from the non-profit Society of Family Planning estimates there were 31,180 fewer abortions than prior rates would suggest over a six-month period, a 6% decline, even as abortions administered by virtual clinics rose. Abortions fell 63% across the 22 states that enacted new restrictions and rose 12% in more permissive states.
  • America Is Uniquely Ill-Suited To Handle a Falling Population — U.S. population growth slowed to about 7.4% in the decade to 2020, the slowest since the Great Depression, as the fertility rate fell from above the 2.1 needed for a stable population to 1.67. Because local and regional authorities levy 48% of all U.S. taxes—versus 20% in France and 6% in Britain—shrinking local revenue forces service cuts or tax rises.
  • US Births Are Down Again, After the COVID Baby Bust and Rebound — US births declined steadily for years before the pandemic, with almost 600,000 fewer annual births in 2019 than in 2007, a 13% drop. The pandemic-related baby bust and subsequent rebound were short-term deviations from that longer trend, and 2022 birth counts remained below 2019 levels.

AI Summary. An outbreak of H5N1 avian influenza in U.S. dairy cattle has spread to at least 33 herds across eight states with one confirmed human case, and Texas's agriculture commissioner suspects it began earlier and may have infected up to 40% of Texas Panhandle herds. An H5N1 expert argues containment becomes unlikely once around 10 human cases are detected.

Zeynep Tufekci New York Times
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H5N1 has been detected in 33 dairy herds in eight states. @zeynep reports the Texas commissioner for agriculture “strongly suspected that the outbreak dated back to at least February.”

H5N1 has been detected in 33 dairy herds in eight states. @zeynep reports the Texas commissioner for agriculture “strongly...

Is the response to bird flu in dairy herds adequate?

Core argument: H5N1 avian influenza has spread to at least 33 dairy herds across eight states since the outbreak was first reported on March 25, with one confirmed human case so far.

The outbreak of H5N1 avian influenza among U.S. dairy cows, first reported on March 25, has now spread to at least 33 herds in eight states. So far there is only one confirmed human case. Rick Bright, an expert on the H5N1 virus who served on President Biden’s coronavirus advisory board, told me this is the crucial moment. “There’s a fine line between one person and 10 people with H5N1,” he said. “By the time we’ve detected 10, it’s probably too late” to contain. That’s when I told him what I’d heard from Sid Miller, the Texas commissioner for agriculture. He said he strongly suspected that the outbreak dated back to at least February. The commissioner speculated that back then, as much as 40% of the herds in the Texas Panhandle may have been infected.

Takeaways by Macro Roundup® AI

  1. H5N1 avian influenza has spread to at least 33 dairy herds across eight states since the outbreak was first reported on March 25, with one confirmed human case so far.
  2. Rick Bright, an H5N1 expert who served on President Biden's coronavirus advisory board, said there is "a fine line between one person and 10 people with H5N1," and that by the time 10 cases are detected containment is probably too late.
  3. Texas Agriculture Commissioner Sid Miller said he strongly suspected the outbreak dated back to at least February and speculated that as much as 40% of Texas Panhandle herds may have been infected then.

Related Articles:

  • Bird Flu Is Infecting More Mammals. What Does That Mean for Us? — The H5N1 bird flu strain now circulating globally has spread not only among farmed and wild birds but into many other animals, unlike earlier versions of the virus. Outbreaks in mink and in South American sea mammals suggest the virus most likely adapted to spread between mammals.
  • Bird Flu Outbreak in US Cows: Why Scientists Are Concerned — The H5N1 bird flu virus has been detected in cows from 16 herds across six US states, the first widespread outbreak in cattle after only sporadic prior infections with closely related flu viruses. One infected dairy worker is recovering, and the worker's viral variant carries a mutation linked to more efficient spread in mammals.
  • How the Current Bird Flu Strain Evolved to be so Deadly — A Nature study tracking bird flu genome changes and reported outbreaks found the virus spread three times faster among wild birds than farmed poultry, attributed to mutations letting it adapt to diverse species. Outbreaks, once seasonal with Northern Hemisphere bird migration, have become persistent, killing millions of birds across five continents.

AI Summary. According to States of Change data, 78% of Hispanic eligible voters nationwide are working class, rising to 82% in Arizona and 85% in Nevada. Polling shows the Democratic presidential candidate leading by 1 point among working-class Hispanics but by 39 points among college-educated Hispanics, a 38-point class gap larger than the 30-point gap among whites.

Ruy Teixeira The Liberal Patriot
Date Posted:

In the most recent New York Times/Siena poll, Biden’s margin over Trump among Hispanics is 9pp, down from 23pp in 2020. Ruy Teixeira @AEI notes that Biden leads by just 1pp among working-class Hispanics who make up 78% of Hispanic voters.

In the most recent New York Times/Siena poll, Biden’s margin over Trump among Hispanics is 9pp, down from 23pp in 2020. Ruy...

Is the class divide among Hispanic voters larger than among whites?

Core argument: States of Change data show 78% of Hispanic eligible voters nationwide are working class, rising to 82% in Arizona and 85% in Nevada.

The simple fact of the matter is that there are far, far more working-class than college-educated Hispanics. According to States of Change data, Hispanic eligible voters nationwide are 78% working class. And working-class levels among Latinos are even higher in critical states like Arizona (82%) and Nevada (85%). In terms of voting intentions, Biden leads by just one point among working-class Hispanics but by 39 points among their college-educated counterparts. Interesting, this 38-point reverse class gap is actually larger than the class gap in this poll among whites (30 points).

Takeaways by Macro Roundup® AI

  1. States of Change data show 78% of Hispanic eligible voters nationwide are working class, rising to 82% in Arizona and 85% in Nevada.
  2. Biden leads working-class Hispanics by one point but leads college-educated Hispanics by 39 points, a 38-point reverse class gap.
  3. The 38-point class gap among Hispanics in the poll exceeds the 30-point class gap among whites.

Related Articles:

  • American Politics Is Undergoing A Racial Realignment — National election surveys and Gallup polling show the Democratic Party's advantage among Black, Latino, and Asian voters at its lowest level since 1960. The article argues this shift reflects fading civil rights-era ties, a weakening link between income and party choice, and non-white voters with long-held conservative views aligning their votes with those views.
  • Consistent Signs of Erosion in Black and Hispanic Support for Biden — Polling shows the Democratic presidential candidate's support among nonwhite voters running well below his prior election standing across racial groups, with leads of 72-11 among Black voters, 47-35 among Hispanic registrants, and 40-39 among other nonwhite voters. About 5% of his former nonwhite voters now back the Republican candidate, including 8% of Hispanic voters.
  • Latinos Are Starting U.S. Businesses at a Torrid Pace — Immigrants accounted for 36% of new U.S. business launches last year, up from 25% in 2019, driven by a rise in Latino entrepreneurship, while business creation by white and native-born Americans has slowed. Hispanic-owned startups tend to be smaller, with 46% reporting over $100,000 in annual revenue versus 62% of white-owned firms.

Friday, April 26, 2024

AI Summary. High-wage metro areas, which accounted for roughly two-thirds of US job creation over the previous decade, have seen their share of overall job growth fall below 50%, with the fastest employment growth now occurring in the lowest-wage metros. Job growth in affluent metros has slowed only slightly; the shift reflects rapid expansion elsewhere.

August Benzow Economic Innovation Group
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The highest-income 20% of metro areas, which drove roughly ⅔ of US job creation between 2011-21, have failed to keep up with rapid employment growth in the rest of the country and represented less than 50% of new jobs in 2023. @AugustBenzow

Are low-wage metro areas now leading US job growth?

Core argument: The top 20% of U.S. metro areas by average income generated roughly two-thirds of national job creation over the previous decade, but their share fell below 50% for the first time last year.

Throughout the previous decade, roughly two-thirds of job creation nationwide occurred in the 20% of metro areas with the highest average incomes. Then came the pandemic. After a brief surge in 2020, the contribution of these high-wage metro areas to overall job growth declined steadily, falling below 50% for the first time last year. Not only have other places started converging with these high-wage metros, but the fastest pace of job creation is actually taking place in the lowest-wage metros. Employment growth in affluent metro areas has slowed compared to pre-pandemic levels, but not by much. The more notable story is that these prosperous metro areas are failing to keep up with the rapid employment expansion seen across the rest of the country.

Takeaways by Macro Roundup® AI

  1. The top 20% of U.S. metro areas by average income generated roughly two-thirds of national job creation over the previous decade, but their share fell below 50% for the first time last year.
  2. The fastest pace of job creation is occurring in the lowest-wage metro areas, while other places converge toward the high-wage metros that previously dominated employment gains.
  3. Employment growth in affluent metro areas has slowed only modestly relative to pre-pandemic levels; the more notable shift is the rapid employment expansion across the rest of the country.

Related Articles:

  • Even As Pandemic Fades, People are Still Leaving Big Cities — Lower-density suburbs of large metropolitan areas grew faster than urban cores, mid-size and small metros, and non-metropolitan areas, as domestic out-migration from urban counties more than offsets population gains from international immigration. Nine of the ten most expensive metropolitan areas, many in California, recorded population declines, with Seattle the exception.
  • Economic Prosperity is Shifting Toward the Mountain West and Southeast — The most economically prosperous U.S. zip codes house 80.6m residents and averaged nearly 3x the job growth of "comfortable" zip codes and 10x that of "at-risk" ones. In several Southeast and Mountain West states, a much greater share of the population now lives in top-ranked prosperous zip codes than a decade earlier.
  • Movers And Money: Mapping the Flow of Income During the Pandemic — Manhattan recorded the largest county-level income outflow to other states at $16.5bn, with 27.7 cents of every dollar leaving—$4.6bn—going to Florida, including $2.9bn to Miami-Dade County and $1.1bn to Palm Beach County. California had the largest state-level losses, while Florida was the biggest beneficiary with a net gain of $39bn.

AI Summary. Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.

Devon Long, Will Barnes, and Eka Zhao Bridgewater Associates
Date Posted:

Bridgewater forecasts that Sub-Saharan Africa (3% of global GDP) will have working-age population growth of ~3% over the next 10 years plus 2% productivity growth yielding annual GDP growth of 4.5-5.5%, vs. 3.5-4.5% for China and 5.5-6.5% for India.

How much will Sub-Saharan Africa's population boom raise its global output share?

Core argument: Sub-Saharan Africa is projected to account for a quarter of the world's working-age population within a few decades and to have more working-age people than China in about 10 years.

Sub-Saharan Africa’s population is booming. It is projected to account for a quarter of the world’s working-age population within a few decades and have more people of working age than China in about 10 years. This means that even if productivity growth is modest, sub-Saharan Africa is on track to be one of the fastest-growing areas in the world, and its role in the global economy, which is very small today, 3% of global GDP, will likely increase as well. Our base case for long-term productivity growth in the region is positive but low, around 2%. This would be an improvement from the past decade of relative stagnation but will still keep the region in poverty with limited impact on the rest of the world in the coming decades. Combined with working-age population growth of a little under 3%, this yields a future growth estimate of 4.5-5.5%, compared to 3.5-4.5% for China and 5.5-6.5% for India. Even with anemic productivity growth, the demographic baseline means that sub-Saharan Africa will likely grow as a share of global GDP—but it will remain quite small.

Takeaways by Macro Roundup® AI

  1. Sub-Saharan Africa is projected to account for a quarter of the world's working-age population within a few decades and to have more working-age people than China in about 10 years.
  2. A base case of roughly 2% long-term productivity growth plus working-age population growth of a little under 3% yields estimated growth of 4.5–5.5% for sub-Saharan Africa, versus 3.5–4.5% for China and 5.5–6.5% for India.
  3. Sub-Saharan Africa accounts for 3% of global GDP, and even with low productivity growth its demographic baseline means that share will likely rise while remaining quite small, leaving the region in poverty.

Related Articles:

  • The World Is Becoming More African — United Nations forecasts project Africans will rise from 8% of the world's people in 1950 to one-quarter by 2100, with the continent holding the world's largest workforce within a decade. McKinsey & Company estimates Africa's per-person economic growth has averaged 1% annually since 1990, against India's 5% and China's 9%.
  • Europe Hopes Barbed Wire Will Keep Migrants Out. It Won’t — The total length of border fences in the European Union grew from 315km to 2,163km over roughly a decade, yet unauthorised crossings made up just 0.13% of all external crossings into the EU. Most migrants arrive via the Mediterranean rather than the Balkans or the eastern land border.
  • Saudi Forces Accused of Killing Hundreds of Ethiopian Migrants — Human Rights Watch alleges in a 73-page report that Saudi border forces killed hundreds of Ethiopian migrants attempting to cross into the kingdom from Yemen, firing explosive weapons at them and in some cases asking migrants which limb they would prefer to be shot. Saudi Arabia hosts hundreds of thousands of Ethiopian workers.

AI Summary. Immigrants and their children in English-speaking countries including the US, UK, Canada and Australia tend to be more skilled, hold better jobs and out-earn the native-born, while those in continental Europe fare worse. Immigrants are net fiscal contributors in the US, UK, Australia and Ireland, but net recipients in Belgium, France, Sweden and the Netherlands.

John Burn-Murdoch Financial Times
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.@jburnmurdoch notes that as of 2018 “In terms of the fiscal impact, immigrants pay more in than they get out in the US, UK, Australia and Ireland, but are net recipients in Belgium, France, Sweden and the Netherlands.”

Do English-speaking countries attract more successful immigrants than continental Europe?

Core argument: Immigrants in the US, UK, Australia and Ireland pay more in taxes than they receive in benefits, while immigrants in Belgium, France, Sweden and the Netherlands are net recipients.

Immigrants and their offspring in the UK, US and so on tend to be more skilled, have better jobs and often out-earn the native-born, while those in continental Europe fare worse. In terms of the fiscal impact, immigrants pay more in than they get out in the US, UK, Australia and Ireland, but are net recipients in Belgium, France, Sweden and the Netherlands. The children of immigrants in the UK, US and Canada all experienced smaller racial wage deficits than their parents, but most second-generation immigrants in France and Germany went backwards. Similarly, the poverty rate among immigrants has fallen over the last decade in the UK, US, Australia and Canada, but risen in France, Sweden and the Netherlands.

Takeaways by Macro Roundup® AI

  1. Immigrants in the US, UK, Australia and Ireland pay more in taxes than they receive in benefits, while immigrants in Belgium, France, Sweden and the Netherlands are net recipients.
  2. Immigrants and their children in the UK, US and other Anglosphere countries tend to be more skilled, hold better jobs and often out-earn the native-born, while those in continental Europe fare worse.
  3. The children of immigrants in the UK, US and Canada experienced smaller racial wage deficits than their parents, while most second-generation immigrants in France and Germany went backwards.

Related Articles:

  • New Immigration Estimates Help Make Sense Of The Pace Of Employment — The Congressional Budget Office estimates net immigration was 3.3m in 2023, versus the 1m it had projected, implying faster population and labor force growth than currently reported. The authors estimate this raised real economic growth by about 0.1 percentage point and, by lifting both production and demand, added little price or wage pressure.
  • Without Immigrants, US Working-Age Population Would Shrink — All net US employment growth since early 2020 has been among foreign-born workers, and without immigration the US working-age population would be shrinking — a pattern likely to persist for the rest of the decade. The jump in immigration appears to be enabling a soft landing that most economists had thought impossible.
  • Immigration and the U.S. Economy Since the Pandemic: An Accounting Exercise — The US native-born labor force fell by about 1.2m over four years, a decline driven overwhelmingly by population aging, while foreign-born labor supply grew by about 3m, leaving the overall labor force up roughly 2m. Without immigration, the total US labor force would have shrunk.

AI Summary. Housing costs make up 32% of the Consumer Price Index, so measured inflation depends heavily on rent measurement. The authors find most of the gap between the official U.S. rent index and private measures reflects scope: rent increases for all tenants versus only new tenants, whose rents rose far faster.

Brian Adams, Lara Loewenstein, Hugh Montag and Randal Verbrugge US Bureau of Labor Statistics
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.@LaraLoewenstein and @hmontag3 find that by focusing on new tenants who represent only 13-25% of rentals, alternative rent inflation indices (e.g. Zillow, CoreLogic) overstate average rental inflation when rents are rising.

Why do official and private rent indexes show different inflation rates?

Core argument: In 2022q2 the authors' Average Tenant Repeat Rent index showed 6.68% year-over-year rent inflation, versus 11.49% for their New Tenant index and 4.78% for the published BLS rent index.

Shelter is by far the largest component of the Consumer Price Index (CPI), accounting for 32% of the index. Accurate inflation measurement therefore depends critically on accurate rent inflation measurement, which is the primary input to both tenant and owner equivalent rent. We find that most of the discrepancy between the official BLS rent index and other measures [like Zillow Observed Rent Index (ZORI) or CoreLogic Single Family Rent Index (SFRI)] is due to scope, i.e., due to the differences in rent increases for all tenants versus new tenants. In 2022q2, our Average Tenant Repeat Rent (ATRR) index was recording 6.68 percent year-over-year inflation, while the New Tenant (NTRR) inflation rate was at 11.49 percent. The published BLS rent index was at 4.78 percent. Between 13 and 25 percent of units have new tenants in a month. Several years are needed for a new tenant repeat rent index to achieve a steady sample size. For studying generalized changes in living standards over time or for escalation of social security benefits, an average tenant rent inflation measure is preferred, since it reflects what is happening to the typical household.

Takeaways by Macro Roundup® AI

  1. In 2022q2 the authors' Average Tenant Repeat Rent index showed 6.68% year-over-year rent inflation, versus 11.49% for their New Tenant index and 4.78% for the published BLS rent index.
  2. The authors attribute most of the gap between the official BLS rent index and measures like the Zillow Observed Rent Index and CoreLogic Single Family Rent Index to scope, namely rent increases for all tenants versus new tenants only.
  3. Shelter accounts for 32% of the Consumer Price Index, with rent inflation serving as the primary input to both tenant rent and owner equivalent rent, and between 13 and 25 percent of units have new tenants in a month.

Related Articles:

  • It’s All About Shelter — Producer price inflation for final demand tracks consumer price inflation excluding shelter closely, and both show inflation under control; overall consumer inflation looks hot only because the shelter component is up 5.6%. That shelter measure lags rents by construction, and more current rent series show no recent inflation.
  • The Most Important New Disinflation Indicator — The New Tenant Repeat Rent Index tracks price changes only for units where new tenants have signed leases, using the same underlying data as the Consumer Price Index, and tends to lead official rent measures by about a year. It currently points to significant rent disinflation over the next three quarters.
  • Furman On CPI — Core consumer price inflation has run hot for three consecutive months, at a 3.5% annual rate over 12 months and 4.6% over the past three, undercutting the view that the early-year jump was a seasonal anomaly. Shelter inflation has plateaued around a 5.5% annual rate rather than falling as bottom-up forecasts assumed.

AI Summary. The US government has spent over half of its $39bn in Chips Act semiconductor incentives, and chip companies and supply chain partners have announced $327bn of investments over the next 10 years, according to Semiconductor Industry Association calculations. US data show a 15-fold increase in construction of computing and electronics manufacturing facilities.

Chris Miller Financial Times
Date Posted:

The US government has now spent half of the $39B Chip Act incentives and kicked off an “unexpected investment boom.” Manufacturers and supply chain partners have announced investments totaling $327B over the next 10 years. @crmiller1 @AEIecon

The US government has now spent half of the $39B Chip Act incentives and kicked off an “unexpected investment...

Are semiconductor subsidies driving a US chip manufacturing investment boom?

Core argument: Chip companies and supply chain partners have announced investments totalling $327bn over the next 10 years, according to Semiconductor Industry Association calculations, after the US committed over half of the Chips Act's $39bn in incentives to Intel, TSMC, Samsung, and Micron.

With recent multi-billion-dollar grants to Intel, TSMC, Samsung, and Micron, the US government has now spent over half its $39bn in Chips Act incentives. In so doing it has driven an unexpected investment boom. Chip companies and supply chain partners have announced investments totalling $327bn over the next 10 years, according to Semiconductor Industry Association calculations. US statistics show a stunning 15-fold increase in construction of manufacturing facilities for computing and electronics devices. Will all these promised plants get built? Many of them already are. The scale of fab construction in the US is now stretching contractors’ ability to find workers with speciality skills. TSMC plans high-volume chip production in its first Arizona plant early next year. If the chip market softens, some plants could get postponed, but the disbursement of grants is tied to progress in bringing fabs online. Equity investors will debate whether these new investments can deliver an adequate financial return. Policymakers who see the Chips Act as an insurance policy against geopolitical shocks believe it is already paying dividends.

Takeaways by Macro Roundup® AI

  1. Chip companies and supply chain partners have announced investments totalling $327bn over the next 10 years, according to Semiconductor Industry Association calculations, after the US committed over half of the Chips Act's $39bn in incentives to Intel, TSMC, Samsung, and Micron.
  2. US statistics show a 15-fold increase in construction of manufacturing facilities for computing and electronics devices, with the scale of fab building stretching contractors' ability to find workers with speciality skills.
  3. TSMC plans high-volume chip production in its first Arizona plant early next year, and Chips Act grant disbursement is tied to progress in bringing fabs online, though a softer chip market could postpone some plants.

Related Articles:

  • Western Nations Need A Plan For When China Floods the Chip Market — China's chipmakers are expanding production capacity despite warnings of a global supply glut, with one consultancy projecting the country's chip capacity will grow 60% over three years and potentially double over five. Because Western export restrictions bar China from making the most advanced processors, much of this output will be foundational chips used in cars, household goods, and consumer devices.
  • The US-China Chip War is Escalating — China's imports of chipmaking equipment have reached record highs, with purchases rising from Japan, the Netherlands, and Singapore alongside a rebound in imports from the United States, as Chinese manufacturers work to indigenize chip production. Chinese government and military buyers have obtained some NVIDIA A100 and H100 chips that US sanctions were designed to block.
  • China AI & Semiconductors Rise: US Sanctions Have Failed — China's Kirin 9000S is a better-designed, leading-edge chip than the West realizes, developed without access to extreme ultraviolet lithography or cutting-edge US intellectual property, indicating existing export controls have not worked. The authors argue only decisive, full-scale measures—not half measures—could prevent China from mass-manufacturing chips needed for high-end military applications.