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, July 9, 2024

AI Summary. The authors argue that findings showing little rise in top-1% income concentration depend on assuming tax noncompliance is detected equally well in random audits of the bottom 99% and the top 1%, which reduces measured growth in the top 1% pre-tax income share by 0.46 percentage points and likely understates rising inequality.

John Iselin and Daniel Reck University of Maryland
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.@john_iselin @danhreck propose an alternative estimate of unreported income and find that pre-tax income share of the top 1% rose by 0.52pp from 1962-2014. (labeled in the chart as “PSZ Macro.”)

Do assumptions about undetected tax noncompliance understate rising top income concentration?

Core argument: The authors argue that Auten and Splinter's assumption that random audits detect noncompliance equally well in the bottom 99% and the top 1% reduces measured growth in the top 1% share of pre-tax national income by 0.46 percentage points.

We argue that Auten and Splinter [AS] results are driven by the assumption that detection of noncompliance in random audit data is equally good in the bottom 99% as in the top 1%. This reduces the growth in the share of pre-tax national income held by the top 1% by 0.46 pp. We argue that the rise of pass-through business income since 1986 likely causes this bias to grow significantly over time, leading to an understatement of the increase in inequality. We also review related methods by Piketty, Saez, and Zuckman [PSZ]. These authors’ methods are rooted in the assumption that if reported income grows in concentration, then so should unreported income. We propose a simple alternative method that explicitly imposes this via a distributional neutrality assumption. Under this assumption, growth in the top income share increases by 0.52 pp.

Takeaways by Macro Roundup® AI

  1. The authors argue that Auten and Splinter's assumption that random audits detect noncompliance equally well in the bottom 99% and the top 1% reduces measured growth in the top 1% share of pre-tax national income by 0.46 percentage points.
  2. The authors argue that the rise of pass-through business income since 1986 likely causes this bias to grow over time, understating the increase in inequality.
  3. The authors propose an alternative method that explicitly imposes distributional neutrality — the assumption, rooted in Piketty, Saez, and Zucman's methods, that unreported income grows in concentration alongside reported income — under which growth in the top income share increases by 0.52 percentage points.

Related Articles:

  • Income Inequality in the United States: Using Tax Data to Measure Long-Term Trends — Using administrative tax data with the Survey of Consumer Finances, the authors estimate the top 1% pre-tax income share fell from 11.1% in 1962 to 9.4% in 1979, then rose to 13.8% by 2019, a 3 percentage point rise over the full period. Their after-tax measure shows increases of only 1.4 points since 1979 and 0.2 points since 1962.
  • Comment on Auten and Splinter (2023) — A critique argues that Auten and Splinter's methodology misallocates a large share of untaxed business and capital income to the bottom of the distribution, assuming the top 1% earns only about 15% of untaxed business income while tax data show they earn about 55% of business income overall.
  • Short Reply: Comment on Auten and Splinter (2023) — The assumption that top wealth and capital income shares move in parallel over the long run is problematic, since falling interest rates reduce interest income relative to bond wealth and widen the gap. Fully counting passthrough business income, the authors' top 1% capital income share rose 5 percentage points.

AI Summary. Foreign investors have been the dominant net buyers of longer-dated US Treasuries, purchasing a net $700bn over a 14-month period against $860bn in total net issuance. These purchases came largely from non-official entities such as hedge funds, pension funds, insurance funds, and banks, potentially motivated by high US interest rates or currency speculation.

Joseph Wang Fed Guy Blog
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Foreigners have been the dominant net buyers of long-dated Treasuries over the 14 months ending April 2024, purchasing $700B, over 80% of total net issuance. @Fedguy12 warns that this would make a dollar devaluation “particularly dangerous.”

Are foreign private investors absorbing most long-dated Treasury issuance?

Core argument: Foreigners purchased a net $700bn in longer-dated Treasuries over the 14 months ending April 2024, only modestly below the $860bn in total net issuance of longer-dated Treasuries.

Foreigners have been the dominant net buyers of long-dated Treasuries over the past year by purchasing almost as much as the entire net issuance. Foreigners purchased a net $700b in longer-dated Treasuries over the 14 months ending April 2024. That is only modestly below the $860b in total net issuance of longer-dated Treasuries. Foreign purchasers of longer-dated Treasuries have largely been from the non-official sector while net purchases from the official sector appeared to move with the dollar. While granular data is not available, foreign non-official entities include hedge funds, pension funds, insurance funds, and banks. Their purchases could be motivated by historically high U.S. interest rates, or in part a currency speculation.

Takeaways by Macro Roundup® AI

  1. Foreigners purchased a net $700bn in longer-dated Treasuries over the 14 months ending April 2024, only modestly below the $860bn in total net issuance of longer-dated Treasuries.
  2. Foreign buying of longer-dated Treasuries has come largely from the non-official sector — which includes hedge funds, pension funds, insurance funds, and banks — while official-sector net purchases appeared to move with the dollar.
  3. Foreign purchases of longer-dated Treasuries could be motivated by historically high U.S. interest rates or in part by currency speculation, though granular data on these buyers is not available.

Related Articles:

  • Who Buys Treasuries When the Fed Reduces its Holdings — Analysis of Federal Reserve balance sheet reduction finds that households and broker-dealers absorbed the additional supply of Treasury securities during the 2017–2019 episode, with household holdings correlated with hedge fund holdings. In the first year of the reduction begun in 2022, households purchased a large share while hedge funds did not, and insurance companies and foreign investors also increased holdings.
  • Liquidity Deteriorating in Treasury Markets — A liquidity gauge for US government debt measures the average gap between quoted yields and values implied by fitted yield curves across Treasury notes and bonds with at least one year to maturity, and it indicates deteriorating liquidity. Small average yield errors signal favorable conditions, as mispricings are corrected quickly.
  • In 2023 Foreign Demand for Long Term Treasuries Exceed Net Issuances — Foreign demand for long-term US Treasuries, at just over $450bn, exceeded the Treasury's net long-term issuance of just over $400bn, with that demand not coming from China. Net long-term issuance lagged the fiscal deficit—roughly 1.5% of GDP versus 6%—leaving the increase in the stock of long-term "safe" US assets modest.

AI Summary. Bond yields near 4.5% sit below the 5.5% short-term interest rate, leaving little risk premium, and those yields have been enough to draw buyers back toward normal bond holdings. The author argues yields still need to rise to a sustainable cost of capital given structurally higher fiscal and inflationary spending.

Karen Karniol-Tambour Bridgewater Associates
Date Posted:

Bridgewater Associates co-CIO Karen Karniol-Tambour expects 10-year Treasury yields to rise from the current ~4.5% to compensate for structurally higher fiscal borrowing and investments in AI, remilitarization, rebalancing of supply chains, and energy.

Do bond yields still need to rise further?

Core argument: Bonds are clearing at roughly 4.5% yields, low relative to the 5.5% short-term interest rate, and even allowing for expected easing, the author argues that level embeds little risk premium.

Bonds are clearing at the roughly 4.5% yield levels we’ve seen. This is pretty low relative to the short-term interest rate of 5.5%, and even with expectations of some easing ahead of us, it is hard to argue there is much risk premium in that yield level. Even 4.5% yields were sufficient to persuade bond buyers to begin to normalize their abnormally low bond holdings. This can be thought of as “pent-up demand” for bonds, which slows the process of adjustment to a new cost of capital. Bond yields still need to rise to set a price of capital that is sustainable for the world we’re in, compensating for structurally higher fiscal stimulation and inherently inflationary spending on things like AI investments, remilitarization, rebuilding supply chains to reduce reliance on China, the energy transition, and energy security.

Takeaways by Macro Roundup® AI

  1. Bonds are clearing at roughly 4.5% yields, low relative to the 5.5% short-term interest rate, and even allowing for expected easing, the author argues that level embeds little risk premium.
  2. Yields of 4.5% were enough to prompt bond buyers to begin normalizing abnormally low bond holdings, a "pent-up demand" for bonds that slows adjustment to a new cost of capital.
  3. The author argues bond yields still need to rise to a sustainable price of capital that compensates for structurally higher fiscal stimulation and inflationary spending on AI investment, remilitarization, rebuilding supply chains to reduce reliance on China, the energy transition, and energy security.

Related Articles:

  • Quo Vadis, r*? The Natural Rate Of Interest After The Pandemic — Estimates of the natural rate of interest across core advanced economies suggest it may have increased, though the estimates are widely dispersed and statistically uncertain. Low expected potential growth and rising longevity may weigh on the natural rate, while large fiscal deficits, age-related spending, and public investment needs for infrastructure, defense, and the green transition may push it up.
  • Higher Interest Rates Are Here to Stay — Interest rates will likely stay higher over the next decade than in the decade after the 2008 financial crisis, reflecting factors including high debt levels, deglobalization, higher defense spending, the green transition, populist demands for income redistribution, and persistent inflation. Aging populations may also push developed countries to increase spending.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.

AI Summary. 10-year Treasury yields have moved roughly one-for-one with expectations for Federal Reserve policy, but a gap has opened between the two, suggesting other factors such as the fiscal outlook are influencing long-term rates. Rates markets face a slowing economy arguing for lower rates against structural inflation pressures from deglobalization, the energy transition, immigration restrictions, and defense spending.

Torsten Sløk Apollo
Date Posted:

Noting a gap between 10-year yields and market expectations of Fed cuts, Torsten Sløk wonders if increased demand for capital from structural drivers and the US fiscal outlook are putting upward pressure on yields.

Are long-term rates now moving on more than Fed expectations?

Core argument: 10-year Treasury yields have moved roughly one-to-one with Fed expectations, but a gap has opened up, suggesting other factors, perhaps including the fiscal outlook, are beginning to influence long rates.

In rates markets, there is a tug-of-war between a slowing economy arguing for lower rates versus the structural forces putting upside pressures on inflation and rates (i.e., deglobalization, energy transition, more restrictions on immigration, more defense spending, and significant fiscal challenges). So far, 10s have been moving around one-to-one with Fed expectations, But in recent weeks, a gap has opened up, suggesting that other factors, perhaps including the fiscal outlook, are beginning to play a role for long rates.

Takeaways by Macro Roundup® AI

  1. 10-year Treasury yields have moved roughly one-to-one with Fed expectations, but a gap has opened up, suggesting other factors, perhaps including the fiscal outlook, are beginning to influence long rates.
  2. Rates markets face a tug-of-war between a slowing economy, which argues for lower rates, and structural forces pressuring inflation and rates upward, including deglobalization, the energy transition, immigration restrictions, higher defense spending, and fiscal challenges.

Related Articles:

  • In Search of Safe Havens: The Trust Deficit and Risk-free Investments! — Plotting US Treasury bond rates against a crude fundamental risk-free rate—actual inflation plus real GDP growth—undercuts the argument that central banks set interest rates. Central banks can nudge rates at the margin but cannot override the fundamentals of inflation and real growth.
  • The Fed and the Secular Decline in Interest Rates — The authors find that the long-run decline in US Treasury yields since 1980 is fully accounted for by movements in a narrow window around Federal Reserve policy meetings, while yield changes outside that window prove transitory. They suggest the Federal Reserve conveys information to markets about the long-run level of interest rates.
  • Markets Think Inflation Will Be Too High For The Next 20 Years — Inflation expectations derived from the gap between regular Treasury yields and inflation-indexed Treasury yields show expected annual inflation over the next 10 and 20 years running considerably above expected inflation for the decade beginning 20 years out. Before the pandemic-era inflation surge, actual inflation and expected future inflation tracked each other closely.

AI Summary. Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.

Ronan Lyons, Allison Shertzer, Rowena Gray and David Agorastos National Bureau of Economic Research
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A real housing price index in 30 US cities from 1890-2006 shows that rising prices are concentrated in the West Coast, Northeast, and South Coast. Across cities, there is a significant relationship between zoning and home price appreciation after 1980.

How has the link between zoning restrictiveness and housing prices changed?

Core argument: Real U.S. housing price growth showed almost no relationship with zoning restrictiveness in 1890–1929 (coefficient of -0.02), while the gradient steepened in later periods to 0.48 and 0.29, and reached 0.67 in 1980–2006, suggesting a closer relationship late in the 20th century.

We document different degrees of price growth across cities. For instance, in Figure 7 we show real housing price appreciation by region: the Northeast, the Midwest, the southern coasts, the inland South, and the West Coast. Increases in the home prices of West Coast cities were observable before the late 1940s. In other regions of the United States, prices in the 1950s – and in some cases in the 1980s – were similar in real terms to what they were in 1890 or 1910. There is almost no relationship between real housing price growth and the restrictiveness of zoning in the 1890-1929 period (coefficient of -.02). Zoning was adopted by almost every city in our sample during the 1920s. We see a slightly steeper gradient over the next two periods (coefficients of .48 and .29, respectively). The gradient in the final period (1980-2006) is even steeper, however (coefficient of .67), suggesting a closer relationship between zoning and home price appreciation towards the end of the 20th century.

Takeaways by Macro Roundup® AI

  1. Real U.S. housing price growth showed almost no relationship with zoning restrictiveness in 1890–1929 (coefficient of -0.02), while the gradient steepened in later periods to 0.48 and 0.29, and reached 0.67 in 1980–2006, suggesting a closer relationship late in the 20th century.
  2. West Coast cities saw real home price increases before the late 1940s, while in other U.S. regions real prices in the 1950s — and in some cases the 1980s — were similar to their 1890 or 1910 levels.
  3. Almost every city in the sample adopted zoning during the 1920s, and real housing price appreciation differed across the Northeast, Midwest, southern coasts, inland South, and West Coast.

Related Articles:

  • Inflation Adjusted House Prices 2.4% Below Peak — Inflation-adjusted U.S. house prices are 2.4% below their peak, while the monthly principal-and-interest payment on an equivalent house has risen 12% over one year and 107% over three years, as house prices rose 31% over that three-year span and 30-year mortgage rates went from 2.81% to 6.78%.
  • Higher For Longer and The 2024 Housing Outlook — Sustained higher mortgage rates are expected to weigh most on housing turnover, since nearly all borrowers hold rates below market levels, discouraging moves; the authors project existing home sales of 3.8mn, the fewest annual sales since the early 1990s. Housing starts are projected to fall 4% to 1.34mn.
  • The Great Pandemic Mortgage Refinance Boom — Fourteen million mortgages were refinanced during the COVID-era refinance boom: roughly 5m borrowers extracted a total of $430bn in home equity, while 9m refinanced without extracting equity and cut their aggregate annual housing costs by $24bn.

AI Summary. Sub-Saharan Africa produces more than six times as much food as it did in 1961, but it has achieved this mainly by adding inputs — many more farmers and much more land under cultivation and pasture — rather than by raising productivity. The region badly trails the world in agricultural total factor productivity gains.

Peter Coy New York Times
Date Posted:

Global agricultural TFP has risen 80% since 1961, but only 30% in Sub-Saharan Africa. @petercoy argues this is a major factor holding back economic development.

Is Africa's food output growth coming from inputs rather than productivity?

Core argument: Africa south of the Sahara produces more than six times as much food as it did in 1961, but it has achieved that gain largely by massively increasing inputs rather than productivity.

Africa south of the Sahara is producing more than six times as much food as it did in 1961. Sub-Saharan Africa badly trailing the world as a whole in improvements in total factor productivity of agriculture. While Africa is increasing its output of crops, livestock, and so on, it’s managing to do so only by massively increasing its inputs. That means many more farmers and much more land under cultivation or pasture. It’s better than if farm output hadn’t increased at all, but it’s not what the subcontinent needs to get ahead economically.

Takeaways by Macro Roundup® AI

  1. Africa south of the Sahara produces more than six times as much food as it did in 1961, but it has achieved that gain largely by massively increasing inputs rather than productivity.
  2. Sub-Saharan Africa badly trails the world as a whole in improvements in agricultural total factor productivity, expanding output of crops and livestock through many more farmers and much more land under cultivation or pasture.
  3. Rising farm output driven by input expansion is better than no increase at all, but it is not what Africa south of the Sahara needs to get ahead economically.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — 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.
  • 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%.
  • How Europe Is Paying Other Countries To Police Its Borders — Interceptions of people at sea by Tunisian authorities doubled to 81,000, and the European Union is projected to spend €278mn on migration in Tunisia, with two-thirds of one €105mn package dedicated to border management. Critics argue that outsourcing border enforcement is a short-term fix that leaves the EU open to blackmail by host governments.

Wednesday, July 10, 2024

AI Summary. The authors estimate a causal effect of stock market wealth on business entry, comparing investors with similar portfolios but different returns from idiosyncratic holdings. Effects are concentrated among moderate-wealth owners with returns of 25% or above and in strong stock market years, consistent with gains lifting individuals past a wealth threshold for starting a firm.

Gabriel Chodorow-Reich, Plamen Nenov, Vitor Santos, et al. National Bureau of Economic Research
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Norwegian households with levels of financial wealth between 50-600k kroner, or $5-56k, who saw a 20% increase in their wealth from stock gains were 20% more likely to start a firm, suggesting financial constraints may impede entrepreneurship.

Do stock market gains lead people to start businesses?

Core argument: Stock portfolio returns of 25% or above raise business entry notably among moderate-wealth individuals, while effects for high-wealth individuals are much smaller, identified by comparing investors with the same ex ante portfolio characteristics but different idiosyncratic returns.

Does initial wealth affect who starts a firm or the type of business they build? We show a causal effect of wealth on entry using a research design that compares individuals with the same ex ante stock portfolio characteristics but different ex post market returns arising from idiosyncratic holdings. The first row of Figure 4 presents the estimated relative effects for each wealth bin. There is a notable positive effect of having a relatively high return of 25% or above for the moderate wealth group. In contrast, the effects for high wealth are much smaller. The effect also appears to be asymmetric in the sign of buy-and-hold returns with [the] only significant effects observed for sufficiently high positive returns, consistent with positive returns moving individuals above their wealth cutoff for starting a business. We also examine aggregate return heterogeneity by interacting each of the wealth-by-return bins with whether the aggregate stock return is above or below its median. In bad stock market years, the effect of returns is fairly flat and close to zero. In contrast, in good stock market years, the propensity to start a business is increasing in return bins, particularly for the moderate wealth stock owners.

Takeaways by Macro Roundup® AI

  1. Stock portfolio returns of 25% or above raise business entry notably among moderate-wealth individuals, while effects for high-wealth individuals are much smaller, identified by comparing investors with the same ex ante portfolio characteristics but different idiosyncratic returns.
  2. The wealth effect on entrepreneurship is asymmetric in the sign of buy-and-hold returns, with significant effects only for sufficiently high positive returns, consistent with gains lifting individuals above a wealth cutoff for starting a business.
  3. In years when aggregate stock returns fall below their median, the effect of individual returns on business formation is fairly flat and close to zero, whereas in good market years the propensity to start a business rises with return bins, particularly for moderate-wealth stock owners.

Related Articles:

  • High Tech Business Entry In The Pandemic Era — High-tech industries accounted for a disproportionate share of the surge in net new business establishments after 2019, with net entry higher in tech than non-tech industries. The authors find suggestive evidence that tech establishment births rose more for existing firms than new firms, though both categories saw elevated openings.
  • America is in the Midst of an Extraordinary Startup Boom — US business-formation applications reached a record 5.5m in a year, with the monthly average running about 80% above the pre-pandemic decade versus a 20% rise in Europe. In the four years before the pandemic, established firms added one net job for every four created by startups; in the four years since, they lost one for every four.
  • 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.

AI Summary. A study finds 24% of the variation across chief executive pay components — salary, bonus, stock awards, options, non-equity incentives, pensions, and perquisites — has disappeared, and that greater similarity in pay structure is associated with lower shareholder value. The author identifies institutional investors' influence, proxy advisors' recommendations, and expanded compensation disclosure as drivers of this standardization.

Felipe Cabezon Journal of Accounting and Economics
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A “one size fits all” model of executive pay has become more common since 2006. This highlights the unintended consequences of the SEC’s rules for standardized pay disclosure in ‘06 and Say on Pay in ‘11, coupled with institutional investors’ influence.

Does standardized executive pay structure reduce shareholder value?

Core argument: Since 2006, 24% of the variation in how CEO pay is distributed across components — salary, bonus, stock awards, options, non-equity incentives, pensions, and perquisites — has disappeared, according to the author's analysis.

I report and analyze a recent “one-size-fits-all” trend in the structure of executive compensation plans. Since 2006, 24% of the variation in the distribution of CEO compensation across pay components —salary, bonus, stock awards, options, non-equity incentives, pensions, and perquisites— disappeared. This uniformity might come at the expense of optimal incentives, as increases in pay structure similarity translate into lower shareholder value. I find that institutional investors’ influence, proxy advisors’ recommendations, and expanded compensation disclosure are salient drivers of this standardization. The findings highlight an unintended consequence of recent regulations enhancing shareholders’ participation and expanding compensation disclosure.

Takeaways by Macro Roundup® AI

  1. Since 2006, 24% of the variation in how CEO pay is distributed across components — salary, bonus, stock awards, options, non-equity incentives, pensions, and perquisites — has disappeared, according to the author's analysis.
  2. The author finds that increases in similarity of executive pay structure translate into lower shareholder value, suggesting the standardization may come at the expense of optimal incentives.
  3. Institutional investors' influence, proxy advisors' recommendations, and expanded compensation disclosure are identified as salient drivers of pay standardization, which the author frames as an unintended consequence of regulations enhancing shareholder participation and disclosure.

Related Articles:

  • The Market for CEOs: Evidence from Private Equity — In a study of larger U.S. companies bought by private equity, more than 70% hired new chief executives, and over 75% of those were external hires, unlike public companies where internal promotions dominate. The authors estimate these executives' pay exceeds that at similar-sized public companies, suggesting an active market for chief executives.
  • Perspectives on the Labor Share — The share of US income going to labor reached its lowest level since the Great Depression, falling roughly 5 percentage points between 1929 and 2022 across most industries, alongside a worldwide decline of about 6 percentage points since 1980. The author argues the most plausible causes are technological, including capital-augmenting technology.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. Large urban counties have continued to lose population of young children even as their overall population growth resumed, driven by immigration. Birth rates in large urban counties have declined twice as fast as in rural counties over the past decade, and the number of children under five fell in 58% of all US counties.

Connor O’Brien Economic Innovation Group
Date Posted:

Families with young children continue to migrate out of large US cities. Since 2020 the population aged 0-4 has fallen by 18% in New York City, 14% in LA County, and 4.6% nationwide. @cojobrien

Are big cities losing young children despite renewed population growth?

Core argument: More than 800,000 people moved out of large urban counties last year, twice the pre-pandemic rate, while those counties' population of young children continued to decline.

Large urban counties have suffered severe declines in their population of young children. While overall population growth in such counties resumed in 2023 (mainly due to immigration) for the first time since the pandemic, the population of young kids continued to decline. Birth rates in large urban counties have declined twice as fast as in rural counties over the last decade. More than 800,000 people moved out of large urban counties last year, twice the pre-pandemic rate. The number of young children in most counties across the country is on the decline. The number of children under five fell in 58% of all counties last year and has fallen in 2/3 of all counties since 2020.

Takeaways by Macro Roundup® AI

  1. More than 800,000 people moved out of large urban counties last year, twice the pre-pandemic rate, while those counties' population of young children continued to decline.
  2. Birth rates in large urban counties have declined twice as fast as in rural counties over the past decade.
  3. The number of children under five fell in 58% of all U.S. counties last year and has fallen in two-thirds of all counties since 2020, even as overall population growth in large urban counties resumed in 2023, mainly due to immigration.

Related Articles:

  • U.S. Fertility Rate Falls to Record Low — 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.
  • Young Families Have Not Returned to Large Cities Post-Pandemic — The under-five population in large urban U.S. counties fell 6.1% while overall population in those counties fell 0.9%, with declines exceeding 10% in the largest counties including New York, Cook County, Illinois, and Los Angeles. Losses of young families were more severe in the Mid-Atlantic and West Coast, while the under-five population grew in Southeastern urban counties.
  • 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.

AI Summary. US regulatory spending has doubled in real terms since the 1970s, alongside growth in the number of pages added annually to the Federal Register and Code of Federal Regulations. According to George Washington University's Regulatory Studies Center, agencies partly funded by fees on the entities they regulate have often seen larger increases in regulatory outlays and staffing.

Michael Cembalest J.P. Morgan
Date Posted:

The recent SCOTUS decision ending Chevron deference will likely lead to what Michael Cembalest @jpmorgan calls “the largest pushback on the regulatory state since the Reagan Administration.”

How much has the regulatory state grown since the 1970s?

Core argument: Real regulatory outlays have doubled since the 1970s, against a backdrop of three decades of gradual expansion in the regulatory state, measured by pages added annually to the Federal Register and the Code of Federal Regulations.

The backdrop to the court’s rulings has been a gradual expansion of the regulatory state over the last three decades. The chart shows the number of pages added each year to the Federal Register and to the Code of Federal Regulations. The Reagan and Trump deregulatory eras are shaded in gray. Regulatory outlays doubled in real terms since the 1970’s. An observation from GW’s Regulatory Studies Center: while tight budgets sometimes constrain regulatory spending at federal agencies, the agencies that are partially funded by fees on entities they regulate have often seen greater increases in regulatory outlays and staffing. The deregulatory impulse may be strengthened further if Republicans sweep Congress. GOP control may enable Trump to sign into law “deregulatory” legislation which would be harder for a future administration to reverse.

Takeaways by Macro Roundup® AI

  1. Real regulatory outlays have doubled since the 1970s, against a backdrop of three decades of gradual expansion in the regulatory state, measured by pages added annually to the Federal Register and the Code of Federal Regulations.
  2. George Washington University's Regulatory Studies Center observes that agencies partially funded by fees on the entities they regulate have often seen greater increases in regulatory outlays and staffing, while tight budgets sometimes constrain regulatory spending at federal agencies.
  3. Republican control of Congress may enable Donald Trump to sign deregulatory legislation into law, which would be harder for a future administration to reverse.

Related Articles:

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AI Summary. Independent Russian media outlets estimate 106,000–140,000 Russian soldiers have been killed in Ukraine, based largely on inheritance records and obituaries, broadly consistent with French officials' estimate of 150,000. Estimates suggest roughly 2% of Russian men aged 20–50 may have been killed or severely wounded since the full-scale war began.

Economist Staff The Economist
Date Posted:

According to independent Russian sources, between 106,000 and 140,000 Russians have been killed in the Russo-Ukraine War since February 2022. Over 2 ½ years, roughly 2% of all Russian men aged 20-50 were killed or seriously wounded in Ukraine.

How many Russian soldiers have been killed in Ukraine?

Core argument: Mediazona and Meduza estimate 106,000–140,000 Russian soldiers had been killed in Ukraine by June 21st, based largely on inheritance records and obituaries, with data since February 6th extrapolated from trends after access to official records was disrupted.

The most recent data by Mediazona and Meduza, two independent Russian media outlets, suggest that Russia’s death toll [is somewhere btw] 106,000-140,000 dead by June 21st. Much of their analysis is based on inheritance records and obituaries on social media and in other outlets. (Their data since February 6th, however, is based on trends, as their access to official records has been disrupted.) Their number is broadly consistent with other recent sources: officials in France recently put the total at 150,000 by May. The greatest losses have been among those aged between 35 and 39, 27,000 of whom are estimated to have been killed between February 2022 and June 2024. But as a percentage of Russia’s male population, losses of those aged between 45 and 49 have been most severe. The latest estimates suggest that roughly 2% of all Russian men aged between 20 and 50 may have been either killed or severely wounded in Ukraine since the start of the full-scale war.

Takeaways by Macro Roundup® AI

  1. Mediazona and Meduza estimate 106,000–140,000 Russian soldiers had been killed in Ukraine by June 21st, based largely on inheritance records and obituaries, with data since February 6th extrapolated from trends after access to official records was disrupted.
  2. Russian men aged 35–39 account for the greatest losses, with an estimated 27,000 killed between February 2022 and June 2024, while losses among those aged 45–49 are most severe as a share of Russia's male population.
  3. Estimates suggest roughly 2% of all Russian men aged 20–50 may have been killed or severely wounded in Ukraine since the start of the full-scale war, while officials in France put the death toll at 150,000 by May.

Related Articles:

  • Putin’s Existential Problem: Not Enough Russians — Russia's population has been declining for years, with Western estimates of at least 150,000 Russian battlefield deaths in Ukraine, nearly a million people leaving the country after the war began, and births at their lowest level in more than two decades. Russia has pledged to spend up to $157bn over six years on measures supporting families and children.
  • Russians Have Emigrated in Huge Numbers Since the War in Ukraine — An analysis network estimates that between 817,000 and 922,000 people have left Russia since the start of the war in Ukraine, roughly 1% of the country's workforce, worsening an acute labour shortage. A Moscow think-tank reported that 35% of manufacturing businesses lacked enough workers, the highest share since 1996.
  • Russian Power in Decline — World Health Organization estimates put remaining life expectancy for 15-year-old Russian males in 2019 at 53.7 years, the same as in Haiti and worse than in 23 of the 46 countries the United Nations classifies as least developed. Projecting from those survival patterns, more than one in four 20-year-old Russian males would die before age 60, twice the European risk.