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, September 24, 2024

AI Summary. A nationally representative U.S. survey found 39% of people aged 18-64 used generative AI, with more than 24% of workers using it in the prior week and nearly one in nine using it every workday. The authors estimate 0.5-3.5% of U.S. work hours are currently assisted by generative AI.

Alexander Bick, Adam Blandin and David Deming National Bureau of Economic Research
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.@ProfDavidDeming and team found that 39% of the US population aged 18-64 used generative AI in August, faster adoption than either the PC or the internet. However, only 0.5-3.5% of US work hours are currently assisted by AI.

How widely have Americans adopted generative AI at work and home?

Core argument: In August 2024, 39% of the U.S. population aged 18–64 used generative AI, according to the first nationally representative U.S. survey of generative AI adoption at work and at home.

This paper reports results from the first nationally representative U.S. survey of generative AI adoption at work and at home. We mention examples of some popular generative AI products because we thought some respondents may be more familiar with those product names than with the broader concept of generative AI. In August 2024, 39% of the U.S. population aged 18-64 used generative AI. More than 24% of workers used it at least once in the week prior to being surveyed, and nearly one in nine used it every workday. Figure 4 compares the speed of adoption of generative AI with two other technologies: PCs and the internet. We estimate that between 0.5 and 3.5% of all work hours in the U.S. are currently assisted by generative AI. Assuming that the productivity gains from recent experimental studies are externally valid, this suggests that generative AI could plausibly increase labor productivity by between 0.125 and 0.875 percentage points at current levels of usage, although we caution that this calculation should be considered highly speculative given the assumptions it requires.

Takeaways by Macro Roundup® AI

  1. In August 2024, 39% of the U.S. population aged 18–64 used generative AI, according to the first nationally representative U.S. survey of generative AI adoption at work and at home.
  2. More than 24% of U.S. workers used generative AI at least once in the week before being surveyed, and nearly one in nine used it every workday.
  3. The authors estimate that 0.5–3.5% of all U.S. work hours are assisted by generative AI, which they calculate could plausibly raise labor productivity by 0.125–0.875 percentage points if experimental productivity gains are externally valid, a figure they call highly speculative.

Related Articles:

  • An Update from Our CIOs: How Durable Is the Economy? — Central banks will likely struggle to deliver the stimulus already priced into rate markets, and the cost of capital must rise enough to offset structurally higher government borrowing and durable private demand. Artificial intelligence spending is inflationary near-term while building capacity, but its deflationary potential is massive and could arrive fast.
  • Navigating the Future of Work — Demographic groups whose work has been more displaced by automation have seen slower real wage growth, and automation is estimated to account for about 70% of between-group wage inequality in the US since 1980. Establishments adopting artificial intelligence have slowed hiring of non-AI workers by more than they have added AI specialists.
  • Generative AI at Work — A study of 5,179 customer support agents finds that access to a generative AI conversational assistant raised issues resolved per hour by 14% on average, with the largest gains for novice and low-skilled workers and minimal effect on experienced, highly skilled ones. The authors also find AI assistance improved customer sentiment, reduced requests for managerial intervention, and improved employee retention.

AI Summary. As artificial intelligence and robots make wages less responsive to employment conditions, the link between tight labor markets and inflation weakens, undermining central banks' inflation-targeting frameworks. The author argues central banks would then need far larger interest-rate moves to achieve the same effect, producing more volatile and less predictable outcomes.

Paul Kedrosky Applied Complexity
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.@pkedrosky argues that the historical relationship between labor markets and wages is being severed by automation. “Our economic frameworks are increasingly misaligned with the realities of an automated economy.”

Does automation weaken the link between tight labor markets and inflation?

Core argument: Robots and AI break the link between wage pressures and inflation, leaving wages less responsive to employment changes and tight labor markets generating weaker inflationary pressure.

As wages in an increasingly AI-economy become less responsive to employment changes, the inflationary pressures that would traditionally result from tight labor markets decline. This is largely due to how robots and AIs break the link between wage pressures and inflation. As such, central banks relying on inflation-targeting regimes that depend on this relationship are facing a growing challenge. The effectiveness of monetary policy in such a scenario is questionable, as central banks may find that traditional tools, such as interest rate adjustments, have less impact on inflation and wage dynamics. The implications are immense. Monetary authorities may be forced to implement much larger-than-usual adjustments in interest rates to achieve the desired economic outcomes. To get the same effect as a smaller rate change once did, central banks will need to raise or lower rates far more aggressively. This will lead to more volatile economic conditions, and even less reliable outcomes, as the traditional metrics for evaluating monetary policy’s effectiveness become less reliable.

Takeaways by Macro Roundup® AI

  1. Robots and AI break the link between wage pressures and inflation, leaving wages less responsive to employment changes and tight labor markets generating weaker inflationary pressure.
  2. Central banks using inflation-targeting regimes that depend on the wage–inflation relationship face a growing challenge, as interest rate adjustments may exert less impact on inflation and wage dynamics.
  3. Monetary authorities may need far more aggressive rate increases or cuts to achieve what smaller changes once did, producing more volatile economic conditions and less reliable outcomes.

Related Articles:

  • Assessing the Implications of a Productivity Miracle — If artificial intelligence can perform economically valuable cognitive tasks at very low marginal cost, consumers would buy far more of the cheapened goods and spend the savings in other categories, expanding activity and employment in sectors facing new demand. Where supply is inherently limited, such as real estate, those savings could bid up prices and produce inflation.
  • The AI Transition One Year Later: On Track, but Macro Impact Still Several Years Off — Investment in AI hardware is projected to rise substantially as a precursor to integrating AI into business processes, with the investment cycle estimated to peak at 2–2½% of GDP and early signs visible among AI-enabling companies. The authors estimate generative AI could raise developed-market labor productivity growth by 1.5pp annually over a 10-year adoption period, roughly 15% cumulatively.
  • Erik Brynjolfsson: ‘This Could Be The Best Decade in History — Or The Worst’ — Studies of large language models across tasks including software coding, consulting, and writing find double-digit productivity gains appearing within months, with less-skilled workers typically benefiting most. Given the large share of modern work these tools can augment, the author projects US productivity growth near 3% annually in the 2020s, roughly double the Congressional Budget Office's 1.4% projection.

AI Summary. Standard metrics indicate U.S. Treasury market liquidity improved to levels last seen before the start of the current monetary policy tightening cycle, with volatility also trending down. Bid-ask spreads widened during earlier market disruptions but narrowed quickly, while order book depth implies worse liquidity.

Michael Fleming Federal Reserve Bank of New York
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The @NewYorkFed finds most measures of US Treasury liquidity – bid-ask spreads, order book depth, impact of trades on prices, and price volatility – indicate Treasuries have become more liquid in 2024, and are back at pre-tightening levels.

Has Treasury market liquidity improved to pre-tightening levels?

Core argument: Standard metrics indicate Treasury market liquidity improved in 2024 to levels last seen before the start of the current monetary policy tightening cycle, with volatility also trending down, consistent with the improved liquidity.

Standard metrics point to an improvement in Treasury market liquidity in 2024 to levels last seen before the start of the current monetary policy tightening cycle. Volatility has also trended down, consistent with the improved liquidity. While at least one market functioning metric has worsened in recent months, that measure is an indirect gauge of market liquidity and suggests a level of current functioning that is far better than at the peak seen during the global financial crisis (GFC). Bid-ask spreads widened during the COVID-related disruptions of March 2020, and again around the banking failures of March 2023, but narrowed quickly after both episodes. Order book depth, measured as the average quantity of securities available for sale or purchase at the best bid and offer prices, implies worse liquidity. Depth plunged in March 2020, recovered thereafter, and then declined again in the months around the start of the current policy rate tightening cycle in March 2022 and around the banking failures in March 2023.

Takeaways by Macro Roundup® AI

  1. Standard metrics indicate Treasury market liquidity improved in 2024 to levels last seen before the start of the current monetary policy tightening cycle, with volatility also trending down, consistent with the improved liquidity.
  2. Treasury bid-ask spreads widened during the COVID-related disruptions of March 2020 and again around the March 2023 banking failures, but narrowed quickly after both episodes.
  3. Order book depth, the average quantity available at the best bid and offer prices, implies worse Treasury liquidity, having plunged in March 2020 and declined again around the March 2022 tightening start and the March 2023 banking failures.

Related Articles:

  • Weaker Demand for Treasuries — Recent 10-year and 30-year US Treasury auctions each cleared three basis points above the yields trading minutes beforehand, signaling demand significantly weaker than the market expected. Larger and more frequent such gaps since the Federal Reserve began raising interest rates make auction metrics an early indicator of weakening Treasury demand.
  • Government Debt in Mature Economies. Safe or Risky? — When governments insulate taxpayers rather than bondholders from unfunded spending shocks, government bond yields rise as debt is marked to market, shifting the risk to bondholders — a "risky debt" regime the authors argue better fits recent experience. In that regime, large-scale central bank asset purchases give government bonds temporary price support at a net loss to taxpayers.
  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.

AI Summary. Europe's demographics track Japan's with roughly a 20-year lag, with its working-age population set to begin declining this decade, while higher migration keeps the U.S. notably younger. Like Japan, Europe has seen rising labor force participation and unemployment at a record low of 6.4%, contributing to accelerating wage growth.

Joseph Wang Fed Guy Blog
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.@FedGuy12 argues that the rise in wages as Japan’s workforce shrinks suggests that aging demographics are likely to be inflationary. Unless offset by automation, this will also put upward pressure on interest rates as the BOJ confronts inflation.

Is Europe following Japan's path toward labor scarcity and faster wages?

Core argument: Europe's unemployment rate stands at a record low of 6.4% alongside rising labor force participation, factors that have contributed to accelerating wage growth in recent years.

The demographics of Europe closely follow those of Japan while that of the U.S. is notably younger due to higher migration. Europe is around 20 years behind Japan in its demographics, with the decline in [the] working age population set to begin this decade. Similar to Japan, Europe is also seeing a rising labor force participation and a declining unemployment rate that is currently at record lows of 6.4%. These factors have contributed to accelerating wage growth in recent years. The Japanese experience suggests these trends will continue as the labor scarcity intensifies. The U.S. has been historically more open to migration than Japan or Europe. Note that many of the U.S. migrants are illegal with less than a high school education, suggesting low productivity and a weaker disinflationary impact.

Takeaways by Macro Roundup® AI

  1. Europe's unemployment rate stands at a record low of 6.4% alongside rising labor force participation, factors that have contributed to accelerating wage growth in recent years.
  2. Europe's demographics trail Japan's by roughly 20 years, with a decline in the working age population set to begin this decade, and the Japanese experience suggests these trends continue as labor scarcity intensifies.
  3. The U.S. population is notably younger than Europe's or Japan's due to higher migration, though many U.S. migrants are illegal with less than a high school education, suggesting low productivity and a weaker disinflationary impact.

Related Articles:

  • Japanese Workers Secure Biggest Pay Rise In Three Decades — Japanese companies including Honda, Nippon Steel, and ANA Holdings granted workers their largest pay rise in more than three decades, with economists expecting large firms to give unionised workers average increases above 4%, up from 3.6% the prior year. The increases strengthen the case for the Bank of Japan to begin raising interest rates.
  • Unions’ Inflation Warning? — The share of people aged 16 and over working or looking for work fell when the pandemic hit and has only partly recovered, with population aging accounting for most of the remaining shortfall. That implies economic activity must run at a lower level to avoid persistent wage and price inflation.
  • 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. A survey of more than 5,000 Americans by the Survey Center on American Life found that nearly 40% of Gen Z women call themselves religiously unaffiliated versus 34% of men, reversing the pattern in every other age group, where men are more likely to be unaffiliated.

Ruth Graham New York Times
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Within Gen Z (18-29) 40% of women are religiously unaffiliated relative to 34% of men, making them the only cohort in which men are more religious than women.

Are young women now less religious than young men?

Core argument: Nearly 40% of Gen Z women describe themselves as religiously unaffiliated versus 34% of Gen Z men, according to a Survey Center on American Life survey of more than 5,000 Americans; in every other age group, men were more likely to be unaffiliated.

Church membership has been dropping in the United States for years. But within Gen Z, almost 40% of women now describe themselves as religiously unaffiliated, compared with 34% of men, according to a survey last year of more than 5,000 Americans by the Survey Center on American Life at the American Enterprise Institute. In every other age group, men were more likely to be unaffiliated. That tracks with research that has shown that women have been consistently more religious than men, a finding so reliable that some scholars have characterized it as something like a universal human truth. About two-thirds of women ages 18 to 29 say that “most churches and religious congregations” do not treat men and women equally, the Survey Center on American Life found.

Takeaways by Macro Roundup® AI

  1. Nearly 40% of Gen Z women describe themselves as religiously unaffiliated versus 34% of Gen Z men, according to a Survey Center on American Life survey of more than 5,000 Americans; in every other age group, men were more likely to be unaffiliated.
  2. Research has shown women to be consistently more religious than men, a finding so reliable that some scholars have characterized it as something like a universal human truth.
  3. About two-thirds of women ages 18 to 29 say "most churches and religious congregations" do not treat men and women equally, the Survey Center on American Life found.

Related Articles:

AI Summary. China's unemployment rate for 16-24 year olds, excluding students, rose to 18.8% from 17.1% the prior month, the highest since the country reintroduced the revised data series. The jobless rate for 25-29 year olds, excluding college students, also rose, to 6.9% from 6.5%.

Sylvia Ma South China Morning Post
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Youth unemployment (16-24) in China hit 18.8% in August, a record high under the new data methodology that excludes students. A previous approach that included students was suspended after hitting 21.3% in June 2023.

Is China's youth unemployment rate climbing to record highs?

Core argument: China's jobless rate for the 16–24 age group excluding students rose to 18.8% in August from 17.1% in July, the highest since the revised data set was reintroduced, according to the National Bureau of Statistics.

China’s revised youth unemployment rate rose to the highest level since the data set was reintroduced last year. The jobless rate for the 16-24 age group, excluding students, rose to 18.8% in August, the National Bureau of Statistics said on Friday, up from 17.1% in July. Meanwhile, the unemployment rate for the 25-29 age group, excluding college students, also rose to 6.9% in August from 6.5% a month earlier. Beijing introduced the revised method for December having suspended the release of youth unemployment data from July last year. Under the previous approach, the jobless rate for the 16-24 age group, including students, had peaked at 21.3% in June last year.

Takeaways by Macro Roundup® AI

  1. China's jobless rate for the 16–24 age group excluding students rose to 18.8% in August from 17.1% in July, the highest since the revised data set was reintroduced, according to the National Bureau of Statistics.
  2. The unemployment rate for China's 25–29 age group, excluding college students, rose to 6.9% in August from 6.5% in July, according to the National Bureau of Statistics.
  3. Beijing suspended youth unemployment releases from July last year and introduced a revised method in December, after the prior measure including students peaked at 21.3% in June last year.

Related Articles:

  • Why Has Youth Unemployment Risen So Much in China? — Young workers aged 15-24 are particularly vulnerable when economic growth slows, and China's youth unemployment rate does not appear to be an outlier relative to its income level among global peers. Mismatches between the skills graduates acquire in higher education and those employers demand may add to labor market frictions.
  • Xi Jinping Calls for Quality Jobs for Youth Instead of ‘Bitterness’ — China's leadership has ordered that providing "high-quality full employment" be an economic priority, with youth unemployment running at nearly three times the overall rate. Unemployment among 16-24 year-olds, excluding students, stood at 14.7% against an urban unemployment rate of 5%.
  • China’s Defeated Youth — Urban Chinese unemployment among those aged 16 to 24 has run above 20%, about double the pre-pandemic level for that age group, with over 70% of unemployed youth in one year calculated to be graduates. Sentiment analysis of social media indicates the mood of young Chinese is growing darker.

Wednesday, September 25, 2024

AI Summary. The authors argue that studies of the Perry Preschool and Carolina Abecedarian early childhood programs yield general lessons about quality resting on adult-child interactions rather than credentials or formal curricula. Across both programs, a one standard deviation increase in measured parenting is associated with a half standard deviation increase in midlife skills.

Alison Baulos, Jorge Luis García and James Heckman National Bureau of Economic Research
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Baulos, Garcia, and Heckman conclude that after 50 years, the Perry Preschool Program shows lasting positive effects and that the key element underlying its success is engaging parents and teachers “actively in the learning life of the child.”

What determines the quality of early childhood education programs?

Core argument: In the Perry Preschool and Carolina Abecedarian programs, a one standard deviation increase in a post-treatment parenting measure collected by age five is associated with a half standard deviation increase in the average of midlife skills.

Drawing insights from both the original founders and recent empirical studies, the paper emphasizes the critical role of parental involvement in early education, advocating for a scientific agenda focused on understanding the mechanisms behind treatment effects. Studies of the Perry Preschool [and the related Carolina Abecedarian Project], offer general lessons, rather than a lesson about the effectiveness of a specific program. The analysis underscores the broader implications of early childhood interventions for social mobility and human capital formation. Analysts of early childhood education should recognize that although credentials and formal curricula contribute to successful programs, the true measure of quality lies in adult-child interactions, which play an essential role. For the two programs, a one st. dev. increase in our post-treatment measure of parenting, collected when the original participants were at most five years old, is associated with an increase of half a standard deviation in the average of midlife skills. This crucial component of Perry—home-visiting—is effective in many different contexts worldwide (see Figure 3).

Takeaways by Macro Roundup® AI

  1. In the Perry Preschool and Carolina Abecedarian programs, a one standard deviation increase in a post-treatment parenting measure collected by age five is associated with a half standard deviation increase in the average of midlife skills.
  2. The paper argues that Perry Preschool and Abecedarian yield general lessons about early childhood intervention rather than evidence about one specific program's effectiveness, with implications for social mobility and human capital formation.
  3. The paper holds that while credentials and formal curricula contribute to program success, quality rests on adult-child interactions, and that home-visiting, a central component of Perry, is effective in many contexts worldwide.

Related Articles:

AI Summary. The authors estimate sustainable sovereign debt limits for 27 advanced economies at 136%–234% of GDP on a gross basis and 181%–268% net of central bank holdings, finding evidence of "fiscal fatigue" once gross debt exceeds roughly 140%–145% of GDP. One estimate puts the US sustainable gross debt limit at 154% of GDP, about 30 percentage points above its current level.

Mark Warshawsky and Giorgi Bokhua American Enterprise Institute
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Mark Warshawsky and Giorgi Bokhua @AEIecon estimate that the US has a sustainable gross debt limit of 154% of GDP, “which is only 30 percentage points above the current level, projected to be reached by 2034.”

How much more debt can advanced economies sustainably carry?

Core argument: The authors estimate a sustainable gross debt limit for the US of 154% of GDP under one estimate, about 30 percentage points above its current gross debt level, a level projected to be reached by 2034.

This paper empirically estimates sustainable sovereign debt limits for 27 OECD countries, updating the model in Ghosh et al. (2013). We assess fiscal reaction functions, confirming the fiscal fatigue hypothesis, where gross debt levels exceeding 140-145% of GDP begin to impair a country’s ability to manage public spending and deficits. Using historical and projected interest rate-to-economic growth differentials, different country samples and updated time periods, we estimate countries’ sustainable debt limits, on both a gross and net of central bank holdings of government debt basis. Gross and net debt limits are between 136%-234% of GDP and 181%-268%, respectively. There are some indications of restricted fiscal flexibility for Canada, France, Italy, the UK, the US, Portugal and Spain. The US, in particular, for one estimate, has a sustainable gross debt limit of 154% of GDP, which is only about 30 percentage points above its current gross debt level, projected to be reached by 2034.

Takeaways by Macro Roundup® AI

  1. The authors estimate a sustainable gross debt limit for the US of 154% of GDP under one estimate, about 30 percentage points above its current gross debt level, a level projected to be reached by 2034.
  2. Across 27 OECD countries, the authors estimate sustainable debt limits of 136%–234% of GDP on a gross basis and 181%–268% net of central bank holdings of government debt.
  3. The estimated fiscal reaction functions support the fiscal fatigue hypothesis, with gross debt above 140%–145% of GDP beginning to impair a country's ability to manage public spending and deficits; the paper indicates restricted fiscal flexibility for Canada, France, Italy, the UK, the US, Portugal and Spain.

Related Articles:

  • When Does Federal Debt Reach Unsustainable Levels? — The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.
  • Federal Debt — Stabilizing federal debt would require a zero primary deficit — borrowing only to cover interest on past borrowing — which today would mean a cash deficit of about 3% of GDP, or roughly $800bn a year. The actual deficit is about $1.7tn, or 6% of GDP, with no political dynamics in prospect that would cut it to 3%.
  • Larry Summers and Bob Rubin Join Our CIOs to Discuss the Surprising Economic Cycle — Adopting the Simpson-Bowles fiscal consolidation when interest rates were at zero would have risked excessive disinflation, since long rates had no room to fall to provide an offsetting expansionary impulse. After the large run-up in debt and rise in real interest rates, the developing fiscal situation risks inflationary pressure, Treasury market disruption, or crowding out of private investment.

AI Summary. Race gaps in SAT scores are consistent across years, with most differences within the range expected from sampling error; the exceptions are Amerindian scores falling and Asian scores rising relative to White scores. The author attributes those shifts to changes in who selects into SAT test-taking rather than genuine population changes.

Cremieux Cremieux Recueil
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In 2024 27% of Asians who took the SAT scored between 1400-1600; 7% of White, 2% of Hispanic, and 1% of Black test takers scored in that range. @cremieuxrecueil

Do shifts in SAT race gaps reflect who chooses to test?

Core argument: Setting Whites as the baseline with a mean of 100 and a standard deviation of 15, the author converts effect sizes (d) into SAT score gaps across racial groups, finding results consistent between years.

[I’ve] set Whites to the baseline for this graph and assume they have a mean of 100 with an SD of 15 and that gaps can be computed from d accordingly. Results are consistent between years, with most differences being within the range of expectations from sampling error. The exceptions are Amerindians and Asians, who, respectively, got much worse and much better relative to Whites. Why? I assume this reflects the continuing trend towards elite Asians selecting into SAT test-taking and elite Amerindians selecting out, rather than genuine population changes. To put these race differences in means and standard deviations into perspective, [the] graph of the data [is] scaled by population size.

Takeaways by Macro Roundup® AI

  1. Setting Whites as the baseline with a mean of 100 and a standard deviation of 15, the author converts effect sizes (d) into SAT score gaps across racial groups, finding results consistent between years.
  2. Most year-over-year differences in SAT racial gaps fall within the range expected from sampling error, the exceptions being Amerindians and Asians, who scored much worse and much better relative to Whites.
  3. The author assumes the Amerindian and Asian shifts reflect a continuing trend of elite Asians selecting into SAT test-taking and elite Amerindians selecting out, rather than genuine population changes.

Related Articles:

  • The Misguided War On The SAT — The National Assessment of Educational Progress, a nationwide test of elementary and middle school students with no test-prep industry around it, shows racial and economic gaps closely resembling those on the SAT and ACT. Researchers argue this indicates college admissions tests measure underlying learning, making score disparities a symptom rather than a cause of inequality.
  • Yale, Princeton and Duke Are Questioned Over Decline in Asian Students — Students for Fair Admissions, which won the Supreme Court case barring race-based admissions preferences, is threatening investigations and lawsuits against Princeton, Yale, and Duke over declines in Asian American enrollment that it says defied expectations. Asian American enrollment fell to 29% from 35% at Duke and to 24% from 30% at Yale.
  • Standardized Test Scores and Academic Performance at Ivy-Plus Colleges — Using admissions records and first-year grades at multiple Ivy-Plus colleges, the authors find SAT and ACT scores substantially predict college academic success even among students with the same high school grades, while high school grade point average does little to predict it. Conditional on test scores, students from lower- and higher-resourced high schools have virtually identical college grades.

AI Summary. OpenAI has pitched the White House on building 5 gigawatt data centers across US states, arguing the expansion is needed to develop more advanced artificial intelligence models and compete with China. Each such facility would use roughly the output of five nuclear reactors, enough to power almost 3m homes.

Shirin Ghaffary Bloomberg
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OpenAI CEO Sam Altman is pitching the Biden Administration on “the economic and national security benefits of building 5GW data centers in various US states.” Each facility would require power generation equivalent to five nuclear reactors.

Does advancing AI and competing with China require city-sized data centers?

Core argument: OpenAI pitched the Biden administration on building 5 GW data centers in various US states, with 5 GW roughly equivalent to five nuclear reactors or enough to power almost 3 million homes.

OpenAI has pitched the Biden administration on the need for massive data centers that could each use as much power as entire cities, framing the unprecedented expansion as necessary to develop more advanced artificial intelligence models and compete with China. Following a recent meeting at the White House the startup shared a document with government officials outlining the economic and national security benefits of building 5 gigawatt data centers in various US states. To put that in context, 5 GW is roughly the equivalent of five nuclear reactors, or enough to power almost 3 million homes. The US has a total of 96 GW of installed capacity of nuclear power.

Takeaways by Macro Roundup® AI

  1. OpenAI pitched the Biden administration on building 5 GW data centers in various US states, with 5 GW roughly equivalent to five nuclear reactors or enough to power almost 3 million homes.
  2. OpenAI framed the data center expansion as necessary to develop more advanced AI models and compete with China, sharing a document with government officials outlining economic and national security benefits after a White House meeting.
  3. The US has 96 GW of total installed nuclear power capacity, and OpenAI's proposed data centers could each use as much power as entire cities.

Related Articles:

  • Three Mile Island’s Nuclear Plant to Reopen, Help Power Microsoft’s AI Centers — Constellation Energy will spend about $1.6bn to restart the undamaged reactor at Pennsylvania's Three Mile Island nuclear plant, which closed in 2019, and has signed a 20-year agreement to sell the power to Microsoft. The deal reflects the scale of round-the-clock carbon-free electricity sought for artificial intelligence data centers.
  • The Good, the Bad and the Ugly — Dominion Energy, which serves 6m customers, has raised its projected power needs for the coming decade, attributing the change to data center demand. McKinsey, BCG, and S&P Global all expect US power demand to grow 13%-15% annually through 2030, and rising transformer costs alongside electrification could make electricity scarcer.
  • Are We on the Brink of an AI Investment Arms Race? — Spending on AI chips and data centers was a bit below $100bn in 2023, around 0.4% of US GDP, and the broader set of companies exposed to AI-related investment has not yet seen a major jump in sales. The authors argue the underlying dynamics point to a spending surge large enough to shape the business cycle.

AI Summary. Around 1.14m people filed asylum claims in Europe in a year, the highest since the 2015 migration crisis, with claims expected to top 1m again; these figures exclude more than 4m Ukrainian refugees granted temporary protection in the European Union. Asylum seekers tend to be less educated and lower skilled than other immigrant groups.

Tom Fairless and Laurence Norman Wall Street Journal
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Last year 1.14mm people filled asylum claims in Europe and 2024 will likely see the same level. The majority who arrived in the Netherlands since 1999 and have left school “are unemployed, though the country suffers from extreme labor shortages.”

How large is Europe's asylum inflow, and who is arriving?

Core argument: Europe recorded a near-record 1.14 million asylum claims last year, the highest since the 2015 crisis, when more than a million Syrians fleeing civil war entered the bloc.

Last year, a near-record 1.14 million people filed asylum claims in Europe, the highest number since the height of the 2015 migration crisis in Europe, when more than a million Syrians fleeing that country’s civil war entered the bloc. Claims are expected to again top one million this year, with 513,000 claims made in the first half of 2024, according to the European Union Agency for Asylum. Those figures don’t include more than four million Ukrainian refugees who have received temporary protection in the EU since the war began. Asylum seekers tend to be less educated and lower skilled than other immigrant groups, said Jan van de Beek, an independent Dutch researcher. Between half and two-thirds of all asylum seekers who arrived in the Netherlands since 1999 and have left school are unemployed and on benefits, even though the country suffers from extreme labor shortages, he said.

Takeaways by Macro Roundup® AI

  1. Europe recorded a near-record 1.14 million asylum claims last year, the highest since the 2015 crisis, when more than a million Syrians fleeing civil war entered the bloc.
  2. The European Union Agency for Asylum counted 513,000 claims in the first half of 2024, with the year again expected to top one million, excluding more than four million Ukrainian refugees granted temporary protection since the war began.
  3. Independent Dutch researcher Jan van de Beek says asylum seekers tend to be less educated and lower skilled than other immigrant groups, and that half to two-thirds of those who arrived in the Netherlands since 1999 and have left school are unemployed and on benefits despite extreme labor shortages.

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AI Summary. Crossings at the US southern border fell to 56,000 in a month from a record 220,000, putting the US on track for its lowest annual apprehensions since 2020, according to government data. A parole program admitting up to 30,000 pre-screened Cubans, Haitians, Venezuelans and Nicaraguans monthly has shifted flows toward legal migration.

Christine Murray Financial Times
Date Posted:

In July, 56,000 people crossed the US southern border illegally, down from a record 220,000 in December. A parole program allows up to an additional 30,000 pre-screened people from Cuba, Haiti, Venezuela, and Nicaragua to enter the US each month.

Have border crackdowns and legal parole programs reduced illegal crossings?

Core argument: Crossings at the US southern border fell to 56,000 in July from a record 220,000 in December, declining steadily since February and putting the US on track for the lowest annual apprehensions since the Covid-19 pandemic began in 2020, according to government data.

56,000 people crossed the US’s southern border in July, down from a record 220,000 in December. Crossings have been falling steadily since February. Despite a small uptick in August, border encounters were 68% lower than the same month a year ago. That has put the US on track for the lowest annual number of apprehensions since the Covid-19 pandemic began in 2020, according to government data. A parole programme introduced late last year allows up to 30,000 pre-screened people from Cuba, Haiti, Venezuela and Nicaragua — all of which are facing political and economic turmoil — to enter the US each month. While that has relieved pressure at the border — US Customs and Border Protection says encounters with individuals from those countries between ports of entry are down 99%— it means that legal migration has risen.

Takeaways by Macro Roundup® AI

  1. Crossings at the US southern border fell to 56,000 in July from a record 220,000 in December, declining steadily since February and putting the US on track for the lowest annual apprehensions since the Covid-19 pandemic began in 2020, according to government data.
  2. Despite a small uptick in August, US border encounters were 68% lower than in the same month a year earlier.
  3. A parole programme allowing up to 30,000 pre-screened people monthly from Cuba, Haiti, Venezuela and Nicaragua has raised legal migration, with US Customs and Border Protection reporting encounters with individuals from those countries between ports of entry down 99%.

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  • How Immigration Remade the U.S. Labor Force — The Congressional Budget Office estimates more than 9m people have migrated on net to the U.S. in recent years, nearly matching the prior decade's total and lifting population growth to almost 1.2% a year. Fewer than 30% are lawful permanent residents; without immigration, growth would be 0.2%.
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