Edward Conard

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  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
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  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
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  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, January 31, 2025

AI Summary. The White House said the US would impose 25% tariffs on Mexico and Canada and a 10% levy on China. Economists warn a trade war would raise costs for imported materials used by US manufacturers, increase consumer prices, and redirect or reduce trade flows, with particularly stark effects on the auto and energy sectors.

Justin Sink Bloomberg
Date Posted:

Effective Saturday the US intends to impose 25% tariffs on Mexico and Canada and a 10% levy on China.

Will new tariffs raise US manufacturing and consumer costs?

Core argument: The White House said President Donald Trump will proceed on February 1 with 25% tariffs on Mexico and Canada and a 10% levy on China, denying a report that implementation would be delayed by a month.

President Donald Trump intends to move ahead with plans on Saturday to impose 25% tariffs on Mexico and Canada and a 10% levy on China, the White House said, denying a report that he planned to delay the implementation by a month. In the first 11 months of 2024, US trade with Canada totaled $699 billion and $776 billion with Mexico. Economists warn a trade war would raise the cost of imported materials used by US manufacturers, hike prices for American consumers and redirect or reduce trade flows. The 25% rate Trump has set for the North American countries would likely have stark impacts on particular sectors, such as the auto and energy industries.

Takeaways by Macro Roundup® AI

  1. The White House said President Donald Trump will proceed on February 1 with 25% tariffs on Mexico and Canada and a 10% levy on China, denying a report that implementation would be delayed by a month.
  2. US trade with Canada totaled $699 billion and with Mexico $776 billion in the first 11 months of 2024.
  3. Economists warn a trade war would raise the cost of imported materials for US manufacturers, hike prices for American consumers and redirect or reduce trade flows, with the 25% rate likely hitting the auto and energy industries.

Related Articles:

  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • Tariffs and Exchange Rates (and Stephen Miran) — The author argues that a universal tariff would prompt enough dollar appreciation to make US exports more expensive abroad, reducing trade flows in both directions while leaving the trade deficit roughly unchanged. Attempting to offset the export drag through deregulation would shift production away from import-competing goods, again leaving a similar trade deficit.
  • Fiscal, Macroeconomic, and Price Estimates of Tariffs Under Both Non-Retaliation and Retaliation Scenarios — The authors estimate the modeled tariff proposals would raise $1.2tn–$4.4tn over 10 years, or 0.3–1.2% of average GDP, with foreign retaliation cutting that revenue by 12–26%. They project consumer prices initially rise 1.2–5.1%, equal to $1,900–$7,600 of lost disposable income per household, with real GDP contracting 0.5–1.4% in the medium term.

AI Summary. Economists argue protective tariffs divert labor and capital toward goods available more cheaply abroad, lowering productivity, wages and growth while raising prices. They contend American manufacturing has not been hollowed out: U.S. industrial production is at an all-time high, 2.5x its level at the last trade surplus, with the smallest manufacturing workforce share since full industrialization.

Phil Gramm and Larry Summers Wall Street Journal
Date Posted:

Phil Gramm and @LHSummers argue that tariffs should not be used as a “general tool of economic policy” as they distort domestic production decreasing American productivity and could “inflict long-term harm on the economy.”

Do protective tariffs lower productivity, wages and growth while raising prices?

Core argument: Gramm and Summers argue U.S. industrial production is at an all-time high, with real industrial output 2.5 times its level in 1975, the last year the U.S. ran a trade surplus, contradicting claims that American manufacturing has been hollowed out.

Our united opposition to non-defense-related tariffs is based not on our faith in free trade but on evidence that tariffs are harmful to the economy. Protective tariffs distort domestic production by inducing domestic producers to commit labor and capital to produce goods and services that could have been acquired more cheaply on the international market. That labor and capital are in turn diverted from producing goods and services that couldn’t be acquired more cheaply internationally. In the process, productivity, wages and economic growth fall while prices rise. Contrary to the repeated claim, there has been no hollowing out of American manufacturing. Industrial production in the U.S. is at an all-time high. The U.S. is producing 2.5 times as much real industrial output as it did when we last ran a trade surplus in 1975. We are producing that record output with the smallest percentage of the labor force involved in manufacturing since America became fully industrialized. This has been a great success for productivity and not a failure of trade, as today’s full employment attests.

Takeaways by Macro Roundup® AI

  1. Gramm and Summers argue U.S. industrial production is at an all-time high, with real industrial output 2.5 times its level in 1975, the last year the U.S. ran a trade surplus, contradicting claims that American manufacturing has been hollowed out.
  2. Gramm and Summers write that record U.S. industrial output is produced with the smallest share of the labor force in manufacturing since America became fully industrialized, which they call a productivity success rather than a failure of trade.
  3. Gramm and Summers argue protective tariffs divert labor and capital toward goods obtainable more cheaply abroad and away from goods that aren't, lowering productivity, wages and growth while raising prices, and they oppose non-defense-related tariffs on that evidence.

Related Articles:

  • China’s Very Bad, No Good Trillion-Dollar Trade Surplus — China's high investment rates face diminishing returns and the government is unwilling to promote higher consumer spending, so it compensates for weak domestic demand with large trade surpluses supported by a weaker currency. The author argues this attempt to export its policy failure will provoke a protectionist backlash from Europe, the UK, and others.
  • Trade Intervention for Freer Trade — The authors argue the United States should counter surplus countries' trade policies either by restricting their goods exports through tariffs or by restricting their capital inflows through taxes, volume limits, reserve requirements, transaction approvals, or investor eligibility rules. They contend capital controls are a more targeted alternative to uniform tariffs, which impose equal costs on more and less mercantilist countries.
  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.

AI Summary. German defence contractor Hensoldt, a maker of air defence radars, is in talks with car suppliers Bosch and Continental to hire just under 200 employees facing redundancy, as booming defence demand contrasts with a struggling automotive sector. Hensoldt has amassed a record order backlog of €6.5bn.

Patricia Nilsson Financial Times
Date Posted:

German defense contractor Hensoldt is offering jobs to approximately 200 laid-off workers from automotive suppliers, as defense booms while autos struggle. Hensoldt’s order backlog hit €6.5B in 2024.

Are defence firms hiring laid-off auto workers to meet soaring demand?

Core argument: German defence contractor Hensoldt amassed a record order backlog of €6.5bn in the first nine months of 2024, with its shares nearly tripling since early 2022.

German defence contractor Hensoldt has offered to take on laid off workers at car suppliers Bosch and Continental, as the country’s defence industry sees booming demand in sharp contrast to its struggling automotive sector. The Bavarian maker of air defence radars is currently in talks with the two automotive suppliers to take on just under 200 employees who are facing redundancy. Hensoldt has amassed a record order backlog of €6.5bn in the first nine months of 2024 with its shares nearly tripling since early 2022.

Takeaways by Macro Roundup® AI

  1. German defence contractor Hensoldt amassed a record order backlog of €6.5bn in the first nine months of 2024, with its shares nearly tripling since early 2022.
  2. Hensoldt, the Bavarian maker of air defence radars, is in talks with car suppliers Bosch and Continental to take on just under 200 employees facing redundancy.
  3. Germany's booming defence demand contrasts with its struggling automotive sector, as Hensoldt offers to take on workers laid off at Bosch and Continental.

Related Articles:

  • Global Defence Groups Hiring At Fastest Rate In Decades Amid Record Orders — A survey of 20 large and medium-sized US and European defence and aerospace companies found they plan to recruit tens of thousands of workers, with 10 of them seeking to add almost 37,000 positions, or nearly 10% of their combined workforce. Demand spans apprentices to executives, including engineers, software developers, cyber security analysts, welders, and mechanics.
  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.
  • Nato’s European Members Discuss 3% Target for Defence Spending — European members of NATO are discussing raising their defence spending target from 2% of GDP to 2.5% in the short term and 3% by 2030, according to people involved in the preliminary talks. Such an increase would strain national budgets and has raised misgivings in many capitals.

AI Summary. The apartment market is projected to shift from renter-friendly to landlord-friendly over the next two to three years as new supply peaks and then falls below prior-cycle levels in every major market. With an estimated 20% of US construction workers undocumented, deportations combined with California rebuilding demand could create a construction labor deficit that raises building costs and rents.

Tracy Alloway, Joe Weisenthal, and Lee Everett Bloomberg
Date Posted:

Lee Everett of Cortland argues rents are likely to rise next year as all major US markets see a slowdown in new supply. Tighter labor markets—due to the deportation of undocumented workers and LA rebuilding—will drive up construction costs and rents.

Will falling apartment supply and construction labor shortages push rents higher?

Core argument: The rental market is expected to shift from renter-friendly to landlord-friendly over the next two to three years, driven by the supply side as deliveries pass their peak.

We're about to transition from what has been a very renter friendly market to again a landlord friendly market over the course of the next two to three years. And that's going to be driven by what we're seeing on the supply side. We're going to have over a million units come to market over a two-year period here in '24 and '25, but peak supply is hitting in the next six months and if you look at relative time from a) peak supply and then b) to getting to a level of lower supply than you saw last cycle, every major market in the country will be there by the end of 2026. It's estimated 20% of construction workers in this country are undocumented labor and I think when you look at a combination of deportation of construction workers as well as the sheer amount of labor it's going to require to rebuild huge swaths of California, I think you could be looking at a massive deficit in labor within the construction space. And when you think about that, that's going to be your strongest lever that's going to hit your cost to build and that's what's going to drive up those rents that are necessary

Takeaways by Macro Roundup® AI

  1. The rental market is expected to shift from renter-friendly to landlord-friendly over the next two to three years, driven by the supply side as deliveries pass their peak.
  2. An estimated 20% of U.S. construction workers are undocumented, and deportations combined with the labor needed to rebuild large swaths of California could create a major construction labor deficit that lifts building costs and rents.

Related Articles:

  • Construction Industry Braces for One-Two Punch: Tariffs and Deportations — Immigrants make up more than half of construction trade workers in Texas, California, New Jersey, and the District of Columbia, and undocumented workers are estimated at 13% of the construction industry, more than twice their share of the overall workforce. Roughly 130,000 newly arrived immigrants have joined the industry, bringing foreign-born construction employment to a record.
  • The Strange and Awful Path of Productivity in the U.S. Construction Sector — U.S. construction sector labor productivity and total factor productivity grew faster than the whole economy in the 1950s and 1960s, then fell, ending 2020 below their 1950 levels while economywide labor productivity and total factor productivity were 290% and 230% higher. Construction labor productivity fell about 1% a year from 1970 to 2020.
  • Why Has Construction Productivity Stagnated? The Role of Land-Use Regulation — Homes built per construction worker boomed after World War II and fell after 1970, a decline the authors link to local land-use regulation that limits project size and keeps construction firms small and less productive. They estimate US residential builders would be roughly 60% more productive if their size distribution matched manufacturing.

AI Summary. Satellite imagery shows China's military constructing a roughly 1,500-acre complex southwest of Beijing that US intelligence assesses will serve as a wartime command center at least 10x the size of the Pentagon. Military experts assess the site's deep excavations will house hardened bunkers to shield Chinese military leaders during conflict, including potentially nuclear war.

Demetri Sevastopulo, Joe Leahy, Ryan McMorrow, Kathrin Hille and Chris Cook Financial Times
Date Posted:

China has begun building the world’s largest military command center in western Beijing—at least 10x the size of the Pentagon. Some US officials call it a “wartime” facility, likely hardened against nuclear strikes. Construction started mid-2024.

Is China building a wartime command center dwarfing the Pentagon?

Core argument: China is building a roughly 1,500-acre military complex 30km south-west of Beijing that US intelligence believes will serve as a wartime command center at least 10 times the size of the Pentagon, according to current and former American officials.

China’s military is building a massive complex in western Beijing that US intelligence believes will serve as a wartime command center far larger than the Pentagon, according to current and former American officials. Satellite images obtained by the Financial Times that are being examined by US intelligence show a roughly 1,500-acre construction site 30km south-west of Beijing with deep holes that military experts assess will house large, hardened bunkers to protect Chinese military leaders during any conflict — including potentially a nuclear war. Several current and former US officials said the intelligence community is closely monitoring the site, which would be the world’s largest military command center — and at least 10 times the size of the Pentagon. Based on an assessment of satellite images obtained by the FT, major construction started in mid-2024. Three people familiar with the situation said some intelligence analysts have dubbed the project “Beijing Military City”.

Takeaways by Macro Roundup® AI

  1. China is building a roughly 1,500-acre military complex 30km south-west of Beijing that US intelligence believes will serve as a wartime command center at least 10 times the size of the Pentagon, according to current and former American officials.
  2. Satellite images obtained by the Financial Times show deep holes at the site that military experts assess will house large, hardened bunkers to protect Chinese military leaders during any conflict, including potentially a nuclear war.
  3. Major construction at the site, which some US intelligence analysts have dubbed "Beijing Military City", started in mid-2024, based on an assessment of satellite images obtained by the Financial Times.

Related Articles:

  • Xi Jinping Says He Is Preparing China for War — China's leadership has emphasized war readiness, announcing a 7.2% increase in the defense budget—which has doubled over the past decade—and plans to reduce dependence on foreign grain imports. China has also opened National Defense Mobilization recruitment offices across the country, while cities in Fujian Province opposite Taiwan build or upgrade air-raid shelters.
  • China Building New Mobile Piers That Could Help Possible Taiwan Invasion — Satellite images of a Chinese state-owned shipyard show six barge-like vessels with extendable ramps under construction, which analysts said could help an invasion force land heavy equipment such as tanks and artillery over Taiwan's mudflats, seawalls and concrete wave-breaking blocks onto firm ground.
  • China Is Ready for War — China's state-owned defense enterprises now account for four of the world's ten largest companies by combined defense and nondefense revenue — including the two largest, Aviation Industry Corporation of China and China State Shipbuilding — and five of the top 12 by defense revenue alone, up from none in the top 100 a decade earlier.

Monday, February 3, 2025

AI Summary. Analysis of U.S. register data finds that employment levels in places exposed to Chinese import competition more than fully rebound, while employment-to-population ratios stay depressed and manufacturing employment continues to shrink. The authors find the recovery comes almost entirely from young adults and foreign-born immigrants taking first jobs in lower-wage service sectors, with both in- and out-migration remaining depressed.

David Autor, David Dorn, Gordon Hanson, Maggie Jones and Bradley Setzler National Bureau of Economic Research
Date Posted:
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Database
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US regions hit by China trade shocks rebounded in jobs but not in employment rates: recovery came from young workers and immigrants entering low-wage roles in health care, education, retail, and hospitality while manufacturing jobs kept shrinking.

How do places hit by import competition regain employment?

Core argument: Using U.S. register data for 2000–2019, employment levels more than fully rebound in places exposed to Chinese import competition after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies.

This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Using comprehensive register data for 2000–2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover primarily by adding workers to non-manufacturing who were below working age when the shock occurred. Entrants are disproportionately native-born Hispanics, foreign-born immigrants, women, and the college-educated, who find employment in relatively low-wage service sectors such as medical services, education, retail, and hospitality. Contrary to standard models, trade shocks reduce geographic mobility, with both in and out migration remaining depressed through 2019. The employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas.

Takeaways by Macro Roundup® AI

  1. Using U.S. register data for 2000–2019, employment levels more than fully rebound in places exposed to Chinese import competition after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies.
  2. The adjustment of trade-exposed U.S. places is generational, with recovery coming primarily from workers who were below working age when the shock occurred entering non-manufacturing jobs in relatively low-wage services such as medical services, education, retail, and hospitality.
  3. Contrary to standard models, trade shocks reduce geographic mobility, with both in- and out-migration remaining depressed through 2019, and the employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas.

Related Articles:

  • The China Shock Revisited: Job Reallocation and Industry Switching in U.S. Labor Markets — Using U.S. Census Bureau administrative data, the authors find that rising Chinese import penetration shifted jobs from manufacturing to services far more in high human capital areas, where within-firm industry switching occurs almost exclusively, producing a net positive employment effect; in low human capital, manufacturing-dependent areas, service gains barely offset manufacturing losses.
  • Manufacturing Jobs Boom Not Reaching Places Hit By The China Shock — U.S. manufacturing job growth since the pandemic is occurring disproportionately in counties least exposed to Chinese import competition in the 2000s, according to an analysis of federal employment and wage data. The counties hardest hit by that import competition still have fewer manufacturing jobs than before the pandemic.
  • Trading Places: Mobility Responses of Native and Foreign-Born Adults to the China Trade Shock — U.S. local labor markets more exposed to import competition from China saw substantially larger net reductions in their foreign-born populations, with no significant reduction among native-born residents. Within exposed areas, foreign-born and native-born workers had comparably sized declines in employment-to-population ratios.

AI Summary. Imports and exports make up about a quarter of U.S. gross domestic product, less than in Germany, Japan, and the United Kingdom, and U.S. imports come from a fairly broad set of countries. Trade accounts for roughly 70% of Canadian and Mexican output, giving the U.S. significant leverage in negotiations with both.

Shannon O'Neil and Julia Huesa Council on Foreign Relations
Date Posted:
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Canada and Mexico are highly dependent on the US market: in 2023, 78% of Canadian goods exports and 80% of Mexican goods exports went to the US. 14% of US goods imports came from Canada, 15% from Mexico, and 14% from China. @shannonkoneil

Does lower trade reliance give the US leverage over neighbors?

Core argument: Imports and exports account for about a quarter of U.S. GDP, leaving the United States less reliant on trade than industrialized peers including Germany, Japan, and the United Kingdom.

The United States is less reliant on trade than many other industrialized economies, including Germany, Japan, and the United Kingdom. Imports and exports make up just a quarter of U.S. gross domestic product (GDP), and the United States sources what it does import from a fairly broad set of nations. Tariffs will hit Canada and Mexico much harder, as trade makes up about 70% of both economies’ GDP. Asymmetries in the cost of tariffs at home give the U.S. significant leverage over its North American partners in negotiations.

Takeaways by Macro Roundup® AI

  1. Imports and exports account for about a quarter of U.S. GDP, leaving the United States less reliant on trade than industrialized peers including Germany, Japan, and the United Kingdom.
  2. Trade makes up about 70% of GDP in both Canada and Mexico, so U.S. tariffs would hit those economies much harder than the United States itself.
  3. The United States sources its imports from a fairly broad set of nations, and asymmetries in the domestic cost of tariffs give it significant leverage over its North American partners in negotiations.

Related Articles:

  • Gramm and Summers: A Letter on Tariffs From Economists to Trump — Economists argue protective tariffs divert labor and capital toward goods available more cheaply abroad, lowering productivity, wages and growth while raising prices. They contend American manufacturing has not been hollowed out: U.S. industrial production is at an all-time high, 2.5x its level at the last trade surplus, with the smallest manufacturing workforce share since full industrialization.
  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • China’s Very Bad, No Good Trillion-Dollar Trade Surplus — China's high investment rates face diminishing returns and the government is unwilling to promote higher consumer spending, so it compensates for weak domestic demand with large trade surpluses supported by a weaker currency. The author argues this attempt to export its policy failure will provoke a protectionist backlash from Europe, the UK, and others.

AI Summary. Canadian oil is shipped to the midwestern United States because pipelines make it a nearby market, while North American manufacturing, especially autos, relies on an integrated just-in-time production system in which lower-wage Mexico specializes in labor-intensive stages. These exports, which account for the bilateral trade deficits, make America richer by lowering energy costs and making U.S. manufacturing more competitive.

Paul Krugman Krugman Wonks Out
Date Posted:

.@paulkrugman notes both Canada and Mexico run overall current account deficits, and that “Canadian oil makes our energy cheaper; by handling the labor-intensive aspects, Mexico makes US manufacturing more competitive.”

Do trade deficits with neighboring countries make America richer?

Core argument: Canada's tar sands oil flows to the midwestern United States because pipelines make it a nearby accessible market, and Krugman argues such exports account for the bilateral deficit while making U.S. energy cheaper.

Oil from Canada’s tar sands is shipped to the midwestern United States because it’s a nearby market that can be accessed by pipelines. Mexico’s story is a bit subtler. Much of North American manufacturing, especially autos, reflects a highly integrated production system that sprawls across all three countries. This system relies on just-in-time production — that is, automotive factories have to be located close enough that their inputs and outputs can arrive quickly by road and rail, rather than taking several weeks to cross the Pacific. Mexico, which has much lower wages than the U.S. or Canada, specializes in the more labor-intensive aspects of production. And I’m reasonably sure that Mexico’s exports of labor-intensive segments of the value chain play a similar role in bilateral imbalances to that played by Canada’s oil exports. Pretty clearly, the Canadian and Mexican exports that account for our bilateral deficits make America richer than it would be without them. Canadian oil makes our energy cheaper; by handling the labor-intensive aspects of production, Mexico makes U.S. manufacturing more competitive.

Takeaways by Macro Roundup® AI

  1. Canada's tar sands oil flows to the midwestern United States because pipelines make it a nearby accessible market, and Krugman argues such exports account for the bilateral deficit while making U.S. energy cheaper.
  2. North American manufacturing, especially autos, operates as a highly integrated production system across the United States, Canada, and Mexico that depends on just-in-time delivery by road and rail rather than multi-week Pacific shipping.
  3. Mexico, with much lower wages than the United States or Canada, specializes in labor-intensive segments of the value chain, which Krugman argues makes U.S. manufacturing more competitive and plays a role in bilateral imbalances similar to Canadian oil.

Related Articles:

  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • Tariffs and Exchange Rates (and Stephen Miran) — The author argues that a universal tariff would prompt enough dollar appreciation to make US exports more expensive abroad, reducing trade flows in both directions while leaving the trade deficit roughly unchanged. Attempting to offset the export drag through deregulation would shift production away from import-competing goods, again leaving a similar trade deficit.
  • Fiscal, Macroeconomic, and Price Estimates of Tariffs Under Both Non-Retaliation and Retaliation Scenarios — The authors estimate the modeled tariff proposals would raise $1.2tn–$4.4tn over 10 years, or 0.3–1.2% of average GDP, with foreign retaliation cutting that revenue by 12–26%. They project consumer prices initially rise 1.2–5.1%, equal to $1,900–$7,600 of lost disposable income per household, with real GDP contracting 0.5–1.4% in the medium term.

AI Summary. The European Union has grown 5% since the end of 2019 while the U.S. expanded 12%, and seven U.S. stocks are worth more than the combined stock markets of Britain, Germany, France, Italy, Spain, the Netherlands and Switzerland. The bloc's priorities shifted from prosperity toward protection of privacy, data and the climate, followed by extensive regulation.

Greg Ip Wall Street Journal
Date Posted:
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Since the end of 2019, the US economy has grown by 12% vs. 5% for the EU. @greg_ip notes that seven US stocks are worth more than the combined market capitalization of major European stock markets.

Has Europe's shift from prosperity to protection slowed its economic growth?

Core argument: The EU economy has grown 5% since the end of 2019, compared with 12% expansion in the U.S. over the same period.

Since the end of 2019 the EU has grown 5% while the U.S. has expanded 12%. Seven U.S. stocks are worth more than the stock markets of Britain, Germany, France, Italy, Spain, the Netherlands and Switzerland, combined. Europeans see their mess as mostly their own making. At the founding of the European project in 1958, its overriding purpose was to tear down barriers to competition and trade among members and to create an internal market with the same freedom of movement, scale and efficiency as the U.S. But sometime in the last 15 years, the bloc’s priorities shifted, from prosperity toward protection—of privacy, of data, of the climate. A tsunami of regulation on everything from website disclosures to carbon emissions followed. Those priorities look badly out of step with today’s reality.

Takeaways by Macro Roundup® AI

  1. The EU economy has grown 5% since the end of 2019, compared with 12% expansion in the U.S. over the same period.
  2. Seven U.S. stocks are worth more than the combined stock markets of Britain, Germany, France, Italy, Spain, the Netherlands and Switzerland.
  3. The EU's priorities shifted over the last 15 years from prosperity toward protection of privacy, data and the climate, followed by extensive regulation spanning website disclosures to carbon emissions, departing from the European project's 1958 purpose of tearing down barriers to competition and trade.

Related Articles:

  • Why the U.S. Economy Is Trouncing Europe’s — Only about 12% of Americans score at the highest levels on international academic tests versus 34% at the lowest, yet the U.S. has created nearly 250 companies worth over $10bn ($30tn in value) against Europe's 14, and median U.S. disposable household income is 25% above Germany's. The author argues expanding high-skilled immigration is the fastest way to accelerate growth.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
  • A Visualization of Europe’s Non-Bubbly Economy — The Draghi report notes that no European Union company with a market capitalization above €100bn was founded from scratch in the past fifty years, while all six US companies valued above €1tn were. The 13 EU companies founded in that period and worth at least $10bn total about $400bn, versus nearly $30tn for their US counterparts.

AI Summary. Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men declined, with the overall decline in marriage driven almost entirely by fewer marriages between non-college women and non-college men. The education gap in women's marriage rates is larger in areas where non-college men face the highest joblessness and incarceration.

Clara Chambers, Benjamin Goldman, and Joseph Winkelmann Harvard University
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The rise in female college enrollment from 1930-80 hasn’t reduced marriage rates for college women. “The overall decline in marriage rates is driven almost entirely by a sharp drop in marriages between non-college women and non-college men.”

Are declining marriage rates concentrated among women without college degrees?

Core argument: Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men steadily declined, counter to the prediction that growing gender education gaps would reduce their marriage prospects.

We show that historical trends over the past half-century and cross-area comparisons from recent cohorts do not support the prediction that growing gender gaps in education will reduce marriage rates for college-educated women. Instead, the data suggest that worsening male outcomes primarily diminish the marriage prospects of non-college women. We show that marriage rates for college-educated women have remained stable over the past fifty years, even as the relative supply of college-educated men has steadily declined. The overall decline in marriage rates is driven almost entirely by a sharp drop in marriages between non-college women and non-college men, who have experienced significant declines in economic and social outcomes over this period. Second, we show that data from recent cohorts across different regions of the U.S. align closely with these historical patterns. In particular, the education gap in marriage rates for women is substantially larger in areas where non-college men face the highest rates of joblessness and incarceration. [Further analysis] shows a consistent and clear correlation across all racial and ethnic groups between the outcomes of men from low-income families and the marriage rates of women from low-income families.

Takeaways by Macro Roundup® AI

  1. Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men steadily declined, counter to the prediction that growing gender education gaps would reduce their marriage prospects.
  2. The overall decline in marriage rates is driven almost entirely by a sharp drop in marriages between non-college women and non-college men, who experienced significant declines in economic and social outcomes over this period.
  3. Across U.S. regions, the education gap in women's marriage rates is substantially larger where non-college men face the highest rates of joblessness and incarceration, with a consistent correlation across all racial and ethnic groups between outcomes of men from low-income families and marriage rates of women from low-income families.

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AI Summary. Marriage and coupling rates are declining across many countries, with the marriage rate for people under 30 in England and Wales down by more than 50% and annual marriages in Iran falling 40% over a decade. The author argues rising expectations among women and falling fortunes for lower-income men are subverting marriage's traditional role as economic insurance.

Derek Thompson The Atlantic
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Globally the rise in women’s expectations and a decline in lower-income men’s fortunes is “subverting the traditional role of straight marriage, in which men are seen as necessary for the economic insurance of their family.” @DKThomp

Why are marriage rates falling around the world?

Core argument: The marriage rate for people under 30 in England and Wales has fallen by more than 50% since 1990, part of a broader decline in coupling across Europe.

Rates of coupling are declining throughout Europe, as well. In England and Wales, the marriage rate for people under 30 has declined by more than 50% since 1990. And it’s not just Europe. The gender researcher Alice Evans has shown that coupling is down just about everywhere. In Iran, annual marriages plummeted by 40% in 10 years. Some Islamic authorities blame Western values and social media for the shift. They might have a point. When women are exposed to more Western media, Evans argues, their life expectations expand. If I had to sum up this big messy story in a sentence, it would be this: Coupling is declining around the world, as women’s expectations rise and lower-income men’s fortunes fall; this combination is subverting the traditional role of straight marriage, in which men are seen as necessary for the economic insurance of their family.

Takeaways by Macro Roundup® AI

  1. The marriage rate for people under 30 in England and Wales has fallen by more than 50% since 1990, part of a broader decline in coupling across Europe.
  2. Annual marriages in Iran fell 40% over 10 years, a shift some Islamic authorities blame on Western values and social media.
  3. Gender researcher Alice Evans argues coupling is declining nearly everywhere as women's expectations expand with exposure to Western media while lower-income men's fortunes fall, subverting marriage's traditional role of men as economic insurance for the family.

Related Articles:

  • Bachelors Without Bachelor’s: Gender Gaps in Education and Declining Marriage Rates — Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men declined, with the overall decline in marriage driven almost entirely by fewer marriages between non-college women and non-college men. The education gap in women's marriage rates is larger in areas where non-college men face the highest joblessness and incarceration.
  • They Used to Be Ahead in the American Economy. Now They’ve Fallen Behind — An analysis of census and American Community Survey microdata compares the average income of full-time workers in specific demographic groups and occupations with the national average for full-time workers, showing how each group's relative economic standing has shifted over the decades.
  • The Anti-Social Century — Americans spend less time with other people than in any period with reliable data back to 1965, with in-person socializing down more than 20% from 2003 to 2023 according to the Bureau of Labor Statistics' American Time Use Survey. Among unmarried men and people under 25, the decline exceeded 35%.