Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, September 13, 2024

AI Summary. Earlier research using pairs of neighboring counties straddling state borders found no relationship between minimum wages and U.S. restaurant employment, but the authors show that result reverses when local economic areas are instead defined as multi-state commuting zones. Under that definition, they estimate an employment elasticity of −0.305 four years after a minimum wage change.

Priyaranjan Jha, David Neumark and Antonio Rodriguez-Lopez National Bureau of Economic Research
Date Posted:

Comparing restaurants in different states within multi-state commuting zones, rather than contiguous county pairs, @NeumarkEcon and team find that a 10% increase in a state’s minimum wage leads to a 3% decrease in restaurant employment after four years.

Does defining local labor markets differently change minimum wage employment effects?

Core argument: Using multi-state commuting zones instead of contiguous county pairs, the authors estimate the cumulative effect of a minimum wage increase on U.S. restaurant employment reaches an elasticity of −0.305 after four years.

Using minimum wage variation within contiguous county pairs sharing a state border, [previous authors] find no relationship between minimum wages and employment in the U.S. restaurantindustry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. Notice that although the cumulative effect of a minimum wage change on restaurant employment is stable around zero when using county pairs, the story is very different when using pairs from multi-state commuting zones. In the latter case, the cumulative effect is near zero two quarters before the minimum wage change, but then it gets into a solid negative trend, reaching a significant elasticity of −0.305 after four years.Therefore, a simple switch of the definition of local economic area—from pairs of contiguous counties sharing a state border, to multi-state commuting zones that are actually defined as local economic areas—dramatically overturns DLR’s finding of a near zero long-term effect of minimum wages on employment in the restaurant industry.

Takeaways by Macro Roundup® AI

  1. Using multi-state commuting zones instead of contiguous county pairs, the authors estimate the cumulative effect of a minimum wage increase on U.S. restaurant employment reaches an elasticity of −0.305 after four years.
  2. The authors report that the estimated employment effect is near zero two quarters before a minimum wage change and then enters a negative trend when local economic areas are defined as multi-state commuting zones.
  3. The authors argue that switching the definition of local economic area from border-county pairs to multi-state commuting zones overturns prior findings of no relationship between minimum wages and restaurant employment, using the same cross-border research design.

Related Articles:

  • How Important are Minimum Wage Increases in Increasing the Wages of Minimum Wage Workers? — The authors find state minimum wage increases account for only a modest share of the wage gains realized by minimum wage workers, with improving macroeconomic conditions and movement across occupations and industries appearing more important. Wage increases are the norm among minimum wage workers even absent minimum wage hikes.
  • The U.S. Low-Wage Structure: A McWage Comparison — Using wage data from most U.S. McDonald's restaurants, the authors find that before the Covid-19 pandemic, differences in entry-level wages across states were strongly related to state minimum wages, with real wages rising only in the roughly half of states raising their minimums. The 2021 wage spike nearly eliminated those geographic differences and left the federal minimum wage near-irrelevant.
  • Does Worker Scarcity Spur Investment, Automation and Productivity? Evidence from Earnings Calls — The authors estimate that a one-unit increase in a firm's labor issues, as measured by earnings calls, raises its investment by 28 basis points, implying roughly $55bn in additional US investment attributable to tighter labor markets. The effect is concentrated in industries relying heavily on routine manual tasks, such as manufacturing assembly and warehouse packaging.

AI Summary. Using U.S. survey and census data, the authors find people are most selective on race in marriage markets, followed by education and age, and are more selective on the combination of income and skill than on either alone. They estimate that increased assortative matching accounts for about half of the rise in household income inequality between 1980 and 2020.

Anton Cheremukhin, Paulina Restrepo-Echavarria and Antonella Tutino Federal Reserve Bank of St. Louis
Date Posted:

Comparing 1980 vs. 2020, Americans became less selective on race and more selective on income and skill in choosing a spouse. “Assortative mating” accounts for ~ 50% of the increase in household income inequality from 1980 to 2020. @paures12

How much of rising household income inequality comes from assortative matching?

Core argument: The authors estimate that the observed increase in assortativeness accounts for approximately half of the rise in U.S. household income inequality between 1980 and 2020.

We use the American Community Survey for the 2008-2021 period, and for longer term comparisons we employ data from the U.S. Census for the years 1960 and 1980. Using the yearly data for the 2008-2021 period allows us to study the effects of the proliferation of online dating. In terms of selection, we find that people are most selective on race followed by a large difference by education and age. Also, people are more selective on the interaction of income and skill than on the two characteristics individually. During the 2008-2021 period, both males and females became slightly more selective on age. When we include the results for 1960 and 1980, it’s clear that both males and females became less selective on race and more selective on income and skill. We find that the observed increase in assortativeness accounts for approximately half of the increase in household income inequality between 1980 and 2020.

Takeaways by Macro Roundup® AI

  1. The authors estimate that the observed increase in assortativeness accounts for approximately half of the rise in U.S. household income inequality between 1980 and 2020.
  2. Using American Community Survey data for 2008–2021, the authors find people are most selective on race, followed by a large difference by education and age, and more selective on the interaction of income and skill than on either characteristic individually.
  3. Comparing U.S. Census data for 1960 and 1980 with 2008–2021 figures, the authors find both males and females became less selective on race and more selective on income and skill, and slightly more selective on age during 2008–2021.

Related Articles:

  • The Marriage Paradox: Understanding And Remedying The Paradoxical Place Of Marriage In America — The U.S. marriage rate has fallen more than 60% since 1970, from 85.9 to 30.5 marriages per 1,000 unmarried Americans aged 15 and older, and the share of adults who are married has dropped from 72% to about 50%. Demographers project roughly one in three young adults may never marry.
  • Intermarriage in America Post-Loving v. Virginia — US interracial marriage rates showed no decline despite heightened public discourse about racial tension, a metric where increased racial tension would be expected to register. The author argues America's ethnoracial composition is more mixed than it has ever been, resembling a Latin American country more than a European one.
  • Online Daters Are Less Open-Minded Than Their Filters Suggest — Data from an online dating service covering 80,000 users across ten cities show women block 70% of potential matches versus 55% for men, largely by excluding shorter or younger users. Among both sexes, the 10% with the strictest filters like 11-13 percentage points fewer of their remaining candidates than the 10% with the broadest filters.

AI Summary. An election forecast model gives Donald Trump a 61% chance of winning the Electoral College even as Kamala Harris leads the national polling average by 2.1 points. The authors caution against reading much into the latest polls, since most come from online or automated-phone firms that typically show little movement.

Nate Silver and Eli McKown-Dawson Silver Bulletin
Date Posted:

The latest @NateSilver538 model shows Harris leading nationally by 2.1pp and gives Trump a 61% chance of winning the electoral college, but he cautions that the traditional polling inputs to the model do not yet reflect Tuesday’s debate.

Can a national polling lead coexist with lower Electoral College odds?

Core argument: Kamala Harris leads Donald Trump by 2.1 points in the Silver Bulletin national polling average, while Trump holds a 61 percent chance of winning the Electoral College in the forecast.

We’ve gotten a few more post-debate polls since yesterday’s update, but not much has changed in our forecast. Kamala Harris leads by 2.1 points in our national polling average, but Donald Trump has a 61 percent chance to win the Electoral College. We’d still caution against reading too much into any of this data just yet. It takes several days to conduct a traditional poll and most of the post-debate data so far comes from online or IVR firms, which typically don’t show a lot of movement.

Takeaways by Macro Roundup® AI

  1. Kamala Harris leads Donald Trump by 2.1 points in the Silver Bulletin national polling average, while Trump holds a 61 percent chance of winning the Electoral College in the forecast.
  2. The Silver Bulletin forecast changed little after additional post-debate polls, and its authors caution against reading too much into the data so far.
  3. Most post-debate polling so far comes from online or IVR firms, which typically show little movement, while traditional polls take several days to conduct.

Related Articles:

  • Many Gen Z Men Feel Left Behind. Some See Trump As An Answer — National polling shows a gender gap of roughly 39 to 51 percentage points among voters under 30, with young men favoring the Republican candidate and young women favoring the Democrat. The Republican message resonates particularly with young men without college degrees and young men of color.
  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • An Unsettled Electorate: How Uncertainty and Apathy Are Shaping the 2024 Election — A survey of young registered voters finds 54% backing Biden and 46% backing Trump, with 60% of young women supporting Biden while 52% of young men support Trump. Young men are more likely than young women to say the country has gone too far in giving women equal rights, 19% versus 9%.

AI Summary. Listed American firms are on average larger and more profitable than European ones, and Europe's productivity lags America's while lacking world-beating corporate giants. The gap is most striking in technology, where American firms are twice as profitable and more than 10x the size.

Economist Staff The Economist
Date Posted:

Compared to EU public companies, US public firms are larger and more profitable. “The difference is particularly striking among tech firms, which are twice as profitable and more than ten times the size in America.”

Are European firms smaller and less profitable than American ones?

Core argument: American tech firms are twice as profitable and more than ten times the size of their European counterparts, the widest gap in a broader pattern among listed companies.

Europe's productivity lags behind America’s, and it lacks world-beating corporate giants. Rising geopolitical tensions have made this problem more acute for European policymakers. They are right to worry. Listed American firms are, on average, bigger and more profitable than European ones. The difference is particularly striking among tech firms, which are twice as profitable and more than ten times the size in America.

Takeaways by Macro Roundup® AI

  1. American tech firms are twice as profitable and more than ten times the size of their European counterparts, the widest gap in a broader pattern among listed companies.
  2. Europe's productivity lags behind America's, and Europe lacks world-beating corporate giants, a shortfall that rising geopolitical tensions have made more acute for European policymakers.
  3. Listed American firms are, on average, bigger and more profitable than European ones, giving European policymakers grounds for concern.

Related Articles:

  • 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.
  • 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.
  • From Strength To Strength — The US produced $25.5tn in GDP, about 25% of the world total—roughly its 1990 share—while China's share stands at 18%; the US share of the G7's nominal GDP rose from 40% in 1990 to 58%. Income per person is now about 30% above western Europe and 54% above Japan, adjusted for purchasing power.

AI Summary. China will raise its retirement age for the first time since 1978, phasing in over 15 years a shift for men from 60 to 63 and for women from 50 to 55 for ordinary workers and 55 to 58 for managers. People 65 and older are projected to reach 30% of the population by around 2035, from 14.2%.

Bloomberg Staff Bloomberg
Date Posted:

China is raising the retirement age from 60 to 63 for men, and from 50 to 55 for women in non-managerial positions, in an effort to enlarge the workforce and shore up pensions.

Is China raising its retirement age as its population ages?

Core argument: China will raise its retirement age for the first time since 1978, to 63 from 60 for men, to 55 from 50 for ordinary female workers, and to 58 from 55 for women in management positions, Xinhua reported.

China will raise the retirement age for the first time since 1978. Top lawmakers endorsed a plan to delay retirement for employees by as long as five years, Xinhua News Agency reported Friday. Men will retire at 63 instead of 60. Women will retire at 55 instead of 50 for ordinary workers, and 58 instead of 55 for those in management positions. The change will take place over 15 years starting January, and will allow more people to work longer. As China’s life expectancy has risen, delaying retirement has become more important to offset the demographic challenges from its decades-long enforcement of a one-child policy, which left a generation of single children supporting a large elderly population. Today, the average Chinese lives to 78 from 66 four decades ago. People aged 65 and older are expected to make up 30% of the population by around 2035 from 14.2% in 2021, according to a report by state broadcaster CCTV on Tuesday.

Takeaways by Macro Roundup® AI

  1. China will raise its retirement age for the first time since 1978, to 63 from 60 for men, to 55 from 50 for ordinary female workers, and to 58 from 55 for women in management positions, Xinhua reported.
  2. The retirement change will phase in over 15 years starting in January, delaying retirement for employees by as long as five years and allowing more people to work longer.
  3. Chinese life expectancy has risen to 78 from 66 four decades ago, and people aged 65 and older are expected to make up 30% of the population by around 2035 from 14.2% in 2021, according to CCTV.

Related Articles:

  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.
  • East Asia’s Coming Population Collapse — United Nations projections show China's population falling 8%, Japan's 18%, South Korea's 12%, and Taiwan's 8% between 2020 and 2050, while the US population rises 12%. Working-age people per person over 65 are projected to drop to about 1.8 in China and 1.2 in Japan and South Korea.
  • A Revolution Is Coming for China’s Families — Prolonged below-replacement fertility in China is projected to produce a "kin crash" in which rising generations have fewer living relatives than ever before in Chinese history. The authors argue this shrinking of extended family networks will erode the Chinese family's role in protecting people from adversity and helping them seize opportunity.

Monday, September 16, 2024

AI Summary. Weakened regulations on institutions enrolling aid-dependent students led to rising enrollment of disadvantaged students, but primarily at low-value institutions where loan performance deteriorated. Institutions in the lowest loan-repayment quintile had a 23% completion rate, $27,760 average post-enrollment earnings, and 20% default rates, versus 73%, $48,375, and 3% at the highest.

Adam Looney and Constantine Yannelis Journal of Economic Perspectives
Date Posted:

Looney and Yannelis tie the US federal student debt crisis to policies that filled weak institutions with students who commonly failed to complete a degree, struggled to repay their loans, defaulted at high rates, and floundered in the job market.

Did weaker regulation push student borrowers into low-value institutions?

Core argument: In 2011, institutions in the lowest student-loan repayment quintile had a 23% enrollment-weighted degree completion rate, average post-enrollment earnings of $27,760, and a 20% default rate.

Starting in the late 1990s, policymakers weakened regulations that had constrained institutions from enrolling aid-dependent students, [leading to] rising enrollment of disadvantaged students, but primarily at poor-performing, low-value institutions. As these new borrowers experienced similarly poor outcomes, their loans piled up, loan performance deteriorated, and with it the finances of the federal program. Institutions offering the highest-quality educations and with the best outcomes expanded enrollment the least, whereas the lowest-performing institutions expanded the most. In 2011, the average enrollment-weighted degree completion rate at institutions in the lowest-repayment rate quintile illustrated in Figure 3 was 23 percent, the average post-enrollment earnings were $27,760, and the average student loan default rate was 20 percent. In contrast, at institutions in the highest repayment rate quintile, 73 percent graduated, their average earnings were $48,375, and the default rate was 3 percent.

Takeaways by Macro Roundup® AI

  1. In 2011, institutions in the lowest student-loan repayment quintile had a 23% enrollment-weighted degree completion rate, average post-enrollment earnings of $27,760, and a 20% default rate.
  2. In 2011, institutions in the highest repayment quintile graduated 73% of students, with average post-enrollment earnings of $48,375 and a 3% default rate.
  3. Policymakers weakened regulations beginning in the late 1990s that had constrained institutions from enrolling aid-dependent students, and enrollment of disadvantaged students rose primarily at poor-performing, low-value institutions, with the lowest-performing institutions expanding the most.

Related Articles:

  • Debt Moratoria: Evidence from Student Loan Forbearance — The authors estimate that borrowers whose student loan payments were frozen ended with about $1,500 more in student loan balances and $1,200 (3%) more in other household debt, including mortgage, auto, and credit card borrowing, than borrowers without a payment stoppage. The findings suggest the pause raised short-term consumption and overall leverage, with effects concentrated among borrowers never previously delinquent.
  • PLUS or Minus? The Effect of Graduate School Loans on Access, Attainment, and Prices — The authors estimate that uncapping federal graduate student borrowing increased previously constrained students' borrowing and shifted their debt from private to federal sources, but had no effect on graduate enrollment, the racial and gender composition of entering students, human capital accumulation, or later earnings. They find the resulting increase in federal loans significantly raised program prices.
  • The Total Cost of Student Debt Cancellation — Recent US student debt cancellation policies are estimated to cost a combined $870bn to $1.4tn, with $620bn already implemented through an income-driven repayment program, interest cancellation during repayment pauses, and targeted discharges. The newest cancellation plan is preliminarily estimated to cost an additional $250bn to $750bn.

AI Summary. US hours worked per person fell 7% between 2000 and 2022, a decline attributable entirely to the employment rate falling from 70% to 65%. Hours now sit roughly at their level in the first years after World War II, 23% below 1900.

Scott Winship Fusion
Date Posted:

.@swinshi notes falling hours worked since 2000 but argues “to the extent that many of our challenges reflect the choices everyday Americans have made, they will require nothing less than cultural change rooted in a recognition of long-denied tradeoffs.”

Why have US hours worked per person declined?

Core argument: U.S. hours worked per person fell 7% from 2000 to 2022, a decline attributable entirely to the employment rate dropping from 70% to 65%.

From 2000 to 2022 hours per person dropped 7%. This decline was entirely due to the employment rate falling from 70% to 65%. Average hours dropped 12% just from 2000 to 2010, leaving labor supply lower than in any year since 1983. Hours in 2020 were similarly low. To some extent, these depressed levels reflect the severity of the Great Recession and the COVID-19 recession, but labor supply also fell from 2000 to 2003 when the economy was expanding. Today, hours are roughly where they were in the first years after World War II—23% lower than in 1900.

Takeaways by Macro Roundup® AI

  1. U.S. hours worked per person fell 7% from 2000 to 2022, a decline attributable entirely to the employment rate dropping from 70% to 65%.
  2. Average hours fell 12% from 2000 to 2010 alone, leaving labor supply lower than in any year since 1983, with hours in 2020 similarly low.
  3. U.S. hours per person stand roughly at their level in the first years after World War II, 23% below 1900, and fell from 2000 to 2003 even as the economy expanded.

Related Articles:

  • Understanding Trends in Worker Pay over the Past 50 Years — Productivity growth has been unequal across industries, across firms within industries, and across workers within firms, slowing growth in both the productivity and the pay of the median worker. The authors argue that working- and middle-class men earlier received "breadwinner rents"—pay above their marginal value to employers—and then endured slow wage growth as women's workforce participation rose.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • Bringing Home the Bacon: Have Trends in Men’s Pay Weakened the Traditional Family? — Using the 25th percentile of pretax earnings among married sole-breadwinner fathers aged 25–29 as a marriageability threshold, the author estimates the share of young single men earning below it moved from 63% to 58% over four decades. Using an earlier baseline year instead yields a larger change, from 72% to 57%.

AI Summary. Consumer price inflation has fallen to 2.5% and core inflation on the Federal Reserve's preferred gauge to an estimated 2.7%, with the remaining gap above the 2% target largely reflecting lagged effects of earlier housing and auto price increases. Inflation-indexed markets project 1.8% consumer price inflation over the coming year.

Greg Ip Wall Street Journal
Date Posted:

Noting inflation-indexed financial instruments are now projecting CPI inflation at 1.8% next year and a mean of 2.2% over the next five years, @greg_ip suggests a 50bps cut in the FFR would be appropriate.

Has inflation fallen enough to justify a half-point rate cut?

Core argument: CPI inflation fell from 3.2% a year earlier to 2.5% in August, while core PCE inflation dropped from 4.2% to an estimated 2.7%, with the remaining gap to the Fed's 2% target largely reflecting lagged housing, auto, and other prices.

A year ago inflation as measured by the consumer-price index was 3.2%. In August, it was 2.5%. In that time, core inflation, which excludes food and energy, has fallen from 4.2% to an estimated 2.7% [using PCE, the Fed’s preferred gauge.] The gap between 2.7% and the Fed’s 2% target largely reflects the lagged effects of higher housing, auto, and other prices from a few years ago. Inflation is likely to keep falling. Oil has plunged from $83 a barrel in early July to below $70 on Friday. This will directly lower headline inflation and, indirectly, core inflation because oil is an input into almost every business. A study by Robert Minton, now at the Fed, and Brian Wheaton at the University of California, Los Angeles, found oil can explain 16% of fluctuations in core inflation, and it takes two years for 80% of the effect to show up. Inflation-indexed bonds and derivatives now project CPI inflation at just 1.8% in the coming year and an average of 2.2% in the following five years, according to the Intercontinental Exchange.

Takeaways by Macro Roundup® AI

  1. CPI inflation fell from 3.2% a year earlier to 2.5% in August, while core PCE inflation dropped from 4.2% to an estimated 2.7%, with the remaining gap to the Fed's 2% target largely reflecting lagged housing, auto, and other prices.
  2. Oil's decline from $83 a barrel in early July to below $70 is expected to lower headline inflation directly and core inflation indirectly, with a study by Robert Minton and Brian Wheaton finding oil can explain 16% of core inflation fluctuations, 80% of the effect appearing within two years.
  3. Inflation-indexed bonds and derivatives project CPI inflation of 1.8% over the coming year and 2.2% on average over the following five years, according to the Intercontinental Exchange.

Related Articles:

  • Do Deficits Cause Inflation? A High Frequency Narrative Approach — Using a high-frequency narrative approach around news about US 2021 deficits, the authors estimate an "inflation multiplier" of 0.18% price-level growth over two years for a deficit shock of 1% of GDP. They estimate this implies the 2021 deficits caused about 30% of the 2021–22 inflation.
  • Quantifying What Fed Cuts Mean for GDP and Inflation — A simulation using a simplified version of the Federal Reserve's model of the US economy estimates that a 100bps cut in the federal funds rate plus guidance for 150bps more would raise GDP by 2% and inflation by 1%. The author argues such cuts would lift stock prices, tighten credit spreads, and risk reaccelerating growth and inflation.
  • Fiscal Influences on Inflation in OECD Countries, 2020-2022 — Across 21 economies, the authors find that headline and core inflation responded positively to a measure of government spending increases scaled by pre-pandemic debt-to-GDP and average debt duration. Estimated coefficients of 0.4–0.5 suggest 40–50% of the extra spending was financed through inflation, with the rest through conventional public finance.

AI Summary. Manufacturing wages in China are 20% of US manufacturing wages, and Indian manufacturing wages are 3% of US levels. GDP per capita is $76,000 in the US, $13,000 in China, and $2,000 in India.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk notes that in 2023, average monthly manufacturing wages in China were 20% of US levels and in India, only 3%. GDP per capita in the US was $76,000 vs. $13,000 in China and $2,000 in India.

How do US manufacturing wages compare with those in China and India?

Core argument: Manufacturing wages in China stand at 20% of US manufacturing wages, while manufacturing wages in India are 3% of the US level.

Manufacturing wages in China are now 20% of manufacturing wages in the US, and manufacturing wages in India are 3% of US wages. For comparison, GDP per capita in the US is $76,000, in China it is $13,000, and in India $2,000.

Takeaways by Macro Roundup® AI

  1. Manufacturing wages in China stand at 20% of US manufacturing wages, while manufacturing wages in India are 3% of the US level.
  2. GDP per capita is $76,000 in the US, $13,000 in China, and $2,000 in India.

Related Articles:

  • How China Could Swamp India’s Chip Ambitions — China is adding more chip-making capacity than the rest of the world combined, all in mature nodes, backed by government incentives worth more than $150bn, according to research consultancy Gavekal Dragonomics. Utilization rates for mature-node chip producers have fallen from nearly 100% to 65–75%, leaving India's $11bn semiconductor push facing an already well-supplied market.
  • Insular India’s Exporters Will Struggle to Fill Chinese Shoes — An analysis estimates that China ceded roughly $150bn of global market share in labor-intensive goods over the decade following the global financial crisis, with India capturing no more than 10% of it while manufacturing's share of India's economy declined. Despite a professed export-oriented policy, India remains too resistant to two-way trade to exploit the opening.
  • China’s Imaginary Trade Data — The International Monetary Fund notes that goods produced in China for nonresident firms are recorded as exports even when they never leave the country, and as imports when resold domestically at higher wholesale prices, creating a goods trade deficit in balance-of-payments data. The author estimates this understates China's goods surplus by roughly $300bn, over 1.5 percentage points of GDP.

AI Summary. China became a leading source country for international adoption, with about 160,000 children placed abroad over three decades, and has now ended the program. American families adopted 82,658 Chinese children between 1999 and 2022, nearly one-third of all US adoptions from foreign countries.

Yi Fuxian Project Syndicate
Date Posted:

China will no longer allow foreign adoptions of Chinese children by non-relatives, in an effort to stem population decline. Over the past 30 years, there have been 160,000 such adoptions with the US as the leading destination. @fuxianyi

Has China ended its international adoption program?

Core argument: China supplied roughly 160,000 children for international adoption over the last three decades, peaking at 13,000 in 2005, aided by an abundance of babies and a centralized, predictable process costing about half as much as adopting in the US.

When it came to supplying children for adoption, China was tough to beat. An abundance of babies and a centralized, predictable, and relatively affordable adoption process – about half as much as adopting in the US – quickly turned China into a leading country-of-origin for international adoptions, which reached 160,000 over the last three decades, peaking in 2005, at 13,000. The US is a leading destination: in 1999-2022, American families adopted 82,658 Chinese children – nearly one-third of all US adoptions from foreign countries. If one includes pre-1999 adoptions, it is estimated that US families have adopted more than 100,000 Chinese children, some of whom were taken from their parents by family-planning officials.

Takeaways by Macro Roundup® AI

  1. China supplied roughly 160,000 children for international adoption over the last three decades, peaking at 13,000 in 2005, aided by an abundance of babies and a centralized, predictable process costing about half as much as adopting in the US.
  2. American families adopted 82,658 Chinese children in 1999-2022, nearly one-third of all US adoptions from foreign countries, and an estimated more than 100,000 when pre-1999 adoptions are included.
  3. China has shut down its international-adoption program, through which some children had been taken from their parents by family-planning officials.

Related Articles:

  • A Revolution Is Coming for China’s Families — Prolonged below-replacement fertility in China is projected to produce a "kin crash" in which rising generations have fewer living relatives than ever before in Chinese history. The authors argue this shrinking of extended family networks will erode the Chinese family's role in protecting people from adversity and helping them seize opportunity.
  • East Asia’s Coming Population Collapse — United Nations projections show China's population falling 8%, Japan's 18%, South Korea's 12%, and Taiwan's 8% between 2020 and 2050, while the US population rises 12%. Working-age people per person over 65 are projected to drop to about 1.8 in China and 1.2 in Japan and South Korea.
  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.

AI Summary. Analyzing ancient DNA for consistent trends in gene-variant frequency over time, the authors report that many hundreds of gene variants were affected by strong directional selection over the last ten millennia. They identify selection for variant combinations today associated with lighter skin color, lower schizophrenia and bipolar risk, slower health decline, and higher intelligence-test scores, income, and schooling.

David Reich, Ali Akbari, et al. bioRxiv
Date Posted:

David Reich and @aliakbari23 find that starting 10,000 years ago human evolution favored traits related to cognitive performance. Alleles associated with higher scores on intelligence tests increased by a standard deviation of .79.

What does ancient DNA reveal about recent human genetic selection?

Core argument: The authors estimate selection coefficients at 9.9 million genetic variants in ancient DNA time-series data, finding that many hundreds of alleles have been affected by strong directional selection over the last ten millennia.

We present a method for detecting evidence of natural selection in ancient DNA time-series data that leverages an opportunity not utilized in previous scans: testing for a consistent trend in allele frequency change over time. In the last ten millennia, many hundreds of alleles have been affected by strong directional selection. We identify selection for combinations of alleles that are today associated with lighter skin color, lower risk for schizophrenia and bipolar disease, slower health decline, and increased measures related to cognitive performance (scores on intelligence tests, household income, and years of schooling). We finally observe signals of selection for combinations of alleles that today predict three 368 correlated behavioral traits: scores on intelligence tests (increasing 0.79 ± 0.14), household 369 income (increasing 1.11 ± 0.14), and years of schooling (increasing 0.61 ± 0.13). We estimate selection coefficients at 9.9 million variants, enabling study of how Darwinian forces couple to allelic effects and shape the genetic architecture of complex traits.

Takeaways by Macro Roundup® AI

  1. The authors estimate selection coefficients at 9.9 million genetic variants in ancient DNA time-series data, finding that many hundreds of alleles have been affected by strong directional selection over the last ten millennia.
  2. The authors identify selection for combinations of alleles today associated with lighter skin color, lower risk for schizophrenia and bipolar disease, slower health decline, and increased measures related to cognitive performance.
  3. The authors report selection signals for combinations of alleles that today predict three correlated behavioral traits: intelligence test scores increasing 0.79 ± 0.14, household income 1.11 ± 0.14, and years of schooling 0.61 ± 0.13.

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