Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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
  • “…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 fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, February 19, 2025

AI Summary. Across more than 31,000 global venture capital deals, 62% lost money and over half lost 50–100% of invested capital, offset by tails far fatter than those of public equities or buyouts. The U.S. venture industry held $1.3tn in assets under management and owned more than 58,000 companies in aggregate.

Michael Mauboussin and Dan Callahan Morgan Stanley
Date Posted:

.@mjmauboussin finds that venture capital, as an asset class, loses more frequently than it wins: 62% percent of global venture capital deals from the mid-1990s to 2018 lost money. But the wins “are so large they offset the losses in the aggregate.”

Do most venture capital deals lose money?

Core argument: Across more than 31,000 global venture capital deal observations from the mid-1990s to 2018, 62% lost money and over half of all deals lost 50–100% of invested capital.

The venture capital industry had $1.3 trillion in AUM in the U.S. in mid-2024, according to PitchBook, a financial data company that tracks private markets. Venture capital funds commonly make 10-50 investments per fund, with funds that invest in later stages on the low side and those that invest in earlier stages on the high side, and own more than 58,000 companies in aggregate. Exhibit 17 shows in excess of 31,000 observations of returns, measured as multiples of invested capital at the beginning of the period, for global venture capital deals. These results are also from the mid-1990s to 2018. 62% percent lose money and more than one-half of all deals lost 50 to 100% of invested capital. The offset is that the tails are much fatter than those for public equities or buyouts.

Takeaways by Macro Roundup® AI

  1. Across more than 31,000 global venture capital deal observations from the mid-1990s to 2018, 62% lost money and over half of all deals lost 50–100% of invested capital.
  2. Venture capital deal returns have much fatter tails than those for public equities or buyouts, offsetting the majority of deals that lose money.
  3. U.S. venture capital had $1.3 trillion in assets under management in mid-2024, according to PitchBook, with funds commonly making 10–50 investments each—fewer at later stages, more at earlier stages—and owning more than 58,000 companies in aggregate.

Related Articles:

  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • Stock Market Concentration — Over 2014–2023 the 10 largest U.S. stocks averaged 19% of market capitalization while generating 47% of total economic profit, and by 2023 they were 27% of market capitalization and 69% of economic profit. The S&P 500 returned above its average when concentration was rising and below it when concentration was falling.

AI Summary. Using regional variation in technology exposure, the authors estimate that digital technology adoption is associated with employment declines concentrated among high-skill and female workers, a departure from earlier information technology and robot adoption, which mainly affected male and low-skill workers. Effects vary by industry, with the largest declines in non-information-technology services.

Sangmin Aum and Yongseok Shin National Bureau of Economic Research
Date Posted:

In cross-regional data on adoption of AI, big data, and IoT in Korea, Aum and Shin find employment fell for high-skill and female workers – especially in non-IT services – but rose for those with a high school education or less.

Does digital technology adoption reduce employment for high-skill and female workers?

Core argument: Exploiting regional variations in technology exposure, the analysis finds digital technology adoption has significantly reduced employment of high-skill and female workers, a departure from the IT revolution and robot adoption, which primarily affected male and low-skill workers.

Exploiting regional variations in technology exposure, our analysis reveals several key findings. First, digital technology adoption has had a significant negative impact on high-skill and female workers, marking a departure from earlier technological changes, such as the IT revolution and robot adoption, which primarily affected male and low-skill workers. [Employment of workers with high school or less has significantly risen in the Table 1 data.] Employment effects vary by industry, with the most pronounced negative impacts observed in the non-IT services industry. The occupations most affected differ across industries: Craft jobs in manufacturing, professionals in IT services, and elementary occupations in other services have all experienced significant declines. The analysis of job vacancies shows an interesting dynamic. While digital technologies reduce employment in certain sectors, they simultaneously increase demand for workers with new skill sets, particularly in IT services, where vacancies for professionals have increased even as their employment declined.

Takeaways by Macro Roundup® AI

  1. Exploiting regional variations in technology exposure, the analysis finds digital technology adoption has significantly reduced employment of high-skill and female workers, a departure from the IT revolution and robot adoption, which primarily affected male and low-skill workers.
  2. The most pronounced negative employment effects of digital technology appear in non-IT services, with significant declines in craft jobs in manufacturing, professionals in IT services, and elementary occupations in other services.
  3. Vacancies for professionals in IT services have increased even as their employment declined, indicating digital technologies raise demand for workers with new skill sets while reducing employment in certain sectors.

Related Articles:

  • Is Software Eating the World? — Using Korean firm- and establishment-level data, the authors estimate that equipment and labor are complements (elasticity 0.6) while software and labor are substitutes (1.6). They find production reallocates toward software-intensive firms, which have higher markups and lower labor shares, raising the aggregate markup and reducing the aggregate labor share.
  • The Rapid Adoption of Generative AI — 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.
  • Technological Disruption in the Labor Market — The authors measure US labor market structure since 1880 and find 1990–2017 less disruptive than any earlier period, because past changes from general-purpose technologies like steam and electricity were so profound. They identify four recent signs of accelerating change, including a 50%+ rise in science and technology employment share since 2010.

AI Summary. Germany has lost nearly 250,000 manufacturing jobs since the start of the Covid pandemic, and energy-intensive companies are producing nearly 20% less than before Russia's war in Ukraine, according to the Federal Statistical Office. Volkswagen, Thyssenkrupp and BASF together shed €50bn, or 34%, of their market value over five years.

Patricia Nilsson, Patrick Mathurin, and Laura Pitel Financial Times
Date Posted:

Germany has lost ~250K manufacturing jobs since COVID. High energy costs, weak demand, and competition from China hit the auto and energy-intensive sectors hardest, with energy-intensive firm production down 20% since 2022.

How steep are Germany's manufacturing job and output losses?

Core argument: Germany has lost almost 250,000 manufacturing jobs since the start of the Covid pandemic, with companies and politicians warning that Europe's industrial heartland faces irreversible decline.

Germany has lost almost a quarter of a million manufacturing jobs since the start of the Covid pandemic as companies and politicians sound the alarm that Europe’s industrial heartland is suffering an irreversible decline. Energy-intensive companies in Germany are now producing nearly 20% less than before [The Russo-Ukraine War], according to the Federal Statistical Office. The contraction of Germany’s industry is evident in the fall of market value in the sector. Together, Dax constituents Volkswagen, Thyssenkrupp and BASF have lost €50bn, or 34%, in market capitalisation over the past five years. From 2010 to 2014, carmakers on the Dax index were more valuable on average than their peers in any other sector, but valuations have slipped as demand has started to falter. VW’s deliveries to customers last year slumped by nearly a fifth compared with the pre-pandemic year of 2019. In other industrials, steelmaker Thyssenkrupp has announced plans to reduce its production capacity by up to a quarter and cut 40% of jobs.

Takeaways by Macro Roundup® AI

  1. Germany has lost almost 250,000 manufacturing jobs since the start of the Covid pandemic, with companies and politicians warning that Europe's industrial heartland faces irreversible decline.
  2. Energy-intensive German companies are producing nearly 20% less than before the Russo-Ukraine war, according to the Federal Statistical Office.
  3. Dax constituents Volkswagen, Thyssenkrupp and BASF have together lost €50bn, or 34%, in market capitalisation over the past five years, and Thyssenkrupp plans to cut production capacity by up to a quarter and 40% of jobs.

Related Articles:

  • 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.
  • Europe is Pricing Itself Out of Existence — Europe paid 166.3% more for its primary energy mix than it would have using conventional sources, equal to 5.6% of GDP rather than 3.37%, which the author argues largely explains minimal European growth. European Union primary energy consumption has fallen 17.47% from its peak, with renewables at 16.6% of the mix and renewable electricity priced at 5x conventional.
  • How German Industry Can Survive the Second China Shock — The European Union has 30mm manufacturing jobs, and China has grown from a $4tn economy producing under 15% of global manufacturing output to an $18tn economy producing over a third, with well over 50% of global capacity in many sectors. European tariffs on Chinese electric vehicles limit import competition but do not offset lost export markets.

AI Summary. Whether real U.S. infrastructure investment rose or fell depends on the inflation index used: the Bureau of Economic Analysis's official price index implies real highway spending rose 11% since 2019, while the National Highway Construction Cost Index, an outlier showing much higher cost inflation, implies a decline. Physical measures of highway miles also show increases.

Ernie Tedeschi and Eric Van Nostrand Briefing Book
Date Posted:

.@ernietedeschi & @vannostrand criticize @jasonfurman’s use of the National Highway Construction Cost Index, “an outlier,” to conclude that real highway spending fell under Biden. Using the BEA’s deflator, real highway spending has risen 11% since 2019.

Has real U.S. infrastructure investment risen or fallen since 2019?

Core argument: Real U.S. highway spending has risen 11 percent since 2019 when deflated with the official Bureau of Economic Analysis price index, according to the authors.

Whether real infrastructure investment rose significantly or fell turns on the specific price index used to adjust for inflation. We find that using the official price index that the Bureau of Economic Analysis (BEA) uses to deflate these data, real highway spending has risen 11 percent since 2019. Professor Furman’s claim that it has fallen depends on using something different, the National Highway Construction Cost Index (NHCCI). The NHCCI is an outlier relative to other measures of highway spending costs. It has shown much more inflation than the official price index, therefore showing less real investment than BEA’s official published series. We also explore non-spending measures of real infrastructure, including miles of highway measured by the Federal Highway Administration and inferred from OpenStreetMap. These measures both show an increase in highway construction since the BIL was passed.

Takeaways by Macro Roundup® AI

  1. Real U.S. highway spending has risen 11 percent since 2019 when deflated with the official Bureau of Economic Analysis price index, according to the authors.
  2. Professor Furman's claim that real highway investment has fallen depends on the National Highway Construction Cost Index, which the authors call an outlier relative to other highway cost measures, showing more inflation and thus less real investment than BEA's series.
  3. Non-spending measures — highway miles from the Federal Highway Administration and miles inferred from OpenStreetMap — both show an increase in highway construction since passage of the Bipartisan Infrastructure Law.

Related Articles:

  • The Post-Neoliberal Delusion — An expansionary policy agenda focused on demand while neglecting supply-side impediments such as permitting obstacles, and the author argues a surge in public spending crowds out private investment. Highway spending rose 36% over a five-year period, but construction costs rose more, leaving real infrastructure spending down 17%.
  • So, Why Didn’t the 2009 Recovery Act Improve the Nation’s Highways and Bridges? — Federal highway grants under the 2009 US Recovery Act raised state highway spending by only about 19 cents per dollar, with states cutting their own contributions by roughly 81 cents per federal dollar amid recession-driven budget stress. The share of structurally deficient or functionally obsolete bridges moved little, from 26.9% to 25.4%.
  • Infrastructure Costs — Building one mile of interstate highway cost 3x more in the 1980s than in the 1960s after adjusting for inflation, an increase not attributed to geography or material and labor prices. The authors find rising incomes and housing prices statistically explain nearly all of the change, with states also building more ancillary structures and complex routes.

AI Summary. Economists at Bank of America argue the neutral interest rate has risen much more than previously thought, so policy may not be restrictive at all. The 30-year mortgage rate, typically 175–200 basis points above the 10-year Treasury yield, now carries a spread of about 250 basis points, which would narrow if the yield curve steepens.

Bill McBride Calculated Risk
Date Posted:

Noting that the natural rate has risen sharply since the pandemic and the 30-year mortgage rate is typically 175-200 bps above the 10-year Treasury yield, @calculatedrisk argues “6% to 7% is the new normal for 30-year fixed mortgage rates!”

Has the neutral rate risen enough that policy isn't restrictive?

Core argument: The 30-year mortgage rate is close to 7%, about 250 bp above the 10-year Treasury yield, compared with a typical spread of 175 to 200 bp, a gap consistent with current volatility and the flat yield curve.

Economists at BofA wrote: “The most reasonable interpretation of the data flow seems to be that the neutral rate has increased a lot more than previously thought, and policy might not be restrictive at all [a view shared by Chairman Powell and much of the FOMC]. The 30-year mortgage rate is typically 175 to 200 bp above the 10-year yield. Here is a graph of the relationship between 30-year mortgage rates and the 10-year yield since 1971. The red dots are for the period Jan 2022 until today. Currently 30-year mortgage rates are close to 7%. This is a spread of about 250 bp to the 10-year yield - something we’d expect given current volatility and the flat yield curve. If the yield curve steepens - either from lower inflation or more growth - then the spread between the 10-year yield and 30-year mortgage rates will decrease.

Takeaways by Macro Roundup® AI

  1. The 30-year mortgage rate is close to 7%, about 250 bp above the 10-year Treasury yield, compared with a typical spread of 175 to 200 bp, a gap consistent with current volatility and the flat yield curve.
  2. BofA economists wrote that the most reasonable interpretation of the data flow is that the neutral rate has risen a lot more than previously thought and policy might not be restrictive at all, a view shared by Chairman Powell and much of the FOMC.
  3. If the yield curve steepens, either from lower inflation or more growth, the spread between the 10-year yield and 30-year mortgage rates will decrease.

Related Articles:

  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • The Price of Housing in the United States — Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.
  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.

AI Summary. Chinese investors' holdings of US government debt fell by $57bn to $759bn, the lowest level since 2009 according to US Treasury data, which excludes Chinese-owned Treasuries held in accounts in other countries. The reported decline was likely exaggerated by assets shifting to securities depositaries in Belgium and Luxembourg.

Arjun Neil Alim, Cheng Leng and Harriet Clarfelt Financial Times
Date Posted:

China’s official US Treasury holdings have dropped to 2009 levels, down ~$550B from their 2011 peak. @Brad_Setser notes that Beijing also holds reserves in Belgium and Luxembourg which have seen Treasury holdings rise ~$676B since 2011.

Does the reported drop in China's Treasury holdings overstate actual selling?

Core argument: Chinese investors' holdings of US Treasuries fell by $57bn to $759bn in 2024, the lowest level since 2009, according to data published by the US Treasury.

The value of US sovereign debt held by Chinese investors fell by $57bn to $759bn in 2024, data published by the US Treasury on Tuesday showed. This does not include Chinese-owned Treasuries held in accounts in other countries. The decline in China’s holdings was likely to have been exaggerated by some assets being moved to securities depositaries such as Belgium-based Euroclear and Luxembourg-based Clearstream, added Brad Setser, which would boost those countries’ holdings in the official data.

Takeaways by Macro Roundup® AI

  1. Chinese investors' holdings of US Treasuries fell by $57bn to $759bn in 2024, the lowest level since 2009, according to data published by the US Treasury.
  2. The US Treasury figures exclude Chinese-owned Treasuries held in accounts in other countries.
  3. Brad Setser said the decline in China's holdings was likely exaggerated by assets moved to securities depositaries such as Belgium-based Euroclear and Luxembourg-based Clearstream, which would boost those countries' holdings in the official data.

Related Articles:

  • Strong Foreign Demand for US Treasuries — Foreign private investors increased their purchases of US Treasuries as yields rose following the Federal Reserve's interest rate increases. Japan is the largest foreign holder of US Treasuries, and recent data show continued strong Japanese demand.
  • The Move in Long Rates Is Very Unusual — The Federal Reserve has cut its policy rate by 100 basis points while 10-year interest rates have risen by 100 basis points over the same stretch, a highly unusual divergence. Possible explanations include fiscal worries, weaker foreign demand for U.S. debt, or rate cuts that were not justified.
  • The Budget and Economic Outlook: 2025 to 2035 — The Congressional Budget Office projects the federal deficit will grow from $1.9tn (6.2% of GDP) to $2.7tn by 2035, well above the 3.8% of GDP average of the past 50 years. Outlays are projected to rise to 24.4% of GDP, driven by growth in Social Security and Medicare spending and rising net interest costs, while revenues reach 18.3%.

Thursday, February 20, 2025

AI Summary. Using an alternative cost-of-living adjustment, the typical 40-year-old's pre-tax family income rose 52% between 1979 and 2019, or 73% adjusting for family size, versus 15% under the methods behind widely cited mobility estimates. Absolute mobility is down 20 percentage points since 1979 but stood at 72% in 2023.

Scott Winship University of Texas
Date Posted:
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.@swinshi argues that 72% of 40-year-olds exceed their parents’ family income excluding government benefits, using his preferred inflation measure and adjusting for family size.  That matches responses to the GSS survey data.

How much does inflation measurement change estimates of income growth and mobility?

Core argument: The typical 40-year-old's pre-tax family income rose 15% between 1979 and 2019 using Chetty's methods, but 52% when adjusted for the cost of living with the MACPI, and 73% after also adjusting for changing family size.

The [Chetty] data allow for annual estimates of the typical (“median”) 40-year-old’s family income. Using the methods that produced Chetty’s headline results, the income typical of a 40-year-old rose by just 15% between 1979 and 2019 (both business cycle peaks). However, using the MACPI to adjust for the rise in the cost of living, the increase was 52%. If we also adjust for changing family size, the increase was 73%. These estimates all involve pre-tax income and exclude government benefits. It's true that no matter what the measure, absolute mobility has fallen over the long run. While absolute mobility is still down 20 percentage points since 1979, in 2023 the rate was 72%. While doomers may be tempted to take a win (a loss?) where they can get it, equating absolute mobility with the American Dream is a mistake. The [Chetty] research shows that Americans who grew up poor have the highest rates of absolute mobility—over 80% by even their preferred measure, compared with less than 20% for adults who grew up with the richest parents. It is, after all, easier to exceed a low parental income than to exceed a high one. It would be difficult, however, to find adults raised poor who would lament that their children are unfortunate for having a higher living standard than they did but a lower likelihood of moving up even further when they grow up. The odds remain solid that their kids will move up again; to the extent those odds diminish, it’s because the parents rose so high that their children could unlikely repeat such a leap.

Takeaways by Macro Roundup® AI

  1. The typical 40-year-old's pre-tax family income rose 15% between 1979 and 2019 using Chetty's methods, but 52% when adjusted for the cost of living with the MACPI, and 73% after also adjusting for changing family size.
  2. Absolute mobility has fallen over the long run, remaining 20 percentage points below its 1979 level, though the rate stood at 72% in 2023.
  3. Chetty's research shows Americans who grew up poor have absolute mobility rates above 80% by even the preferred measure, compared with under 20% for adults raised by the richest parents, since exceeding a low parental income is easier.

Related Articles:

  • Should We Believe the Economic Data or Americans’ “Lyin’” Eyes? The Answer Is Yes — Gallup polling finds that while roughly 80% of Americans say they are dissatisfied with the way things are going in the country, about 80% are satisfied with the way things are going in their own lives, including 90% satisfied with family life, 88% with housing, and 87% each with education and work.
  • Introducing the “More Accurate Consumer Price Index” — The author argues that standard Consumer Price Index measures overstate inflation—by roughly 0.70 percentage points a year for the unchained series and about 0.40 points for chained indexes—and constructs an alternative index for gauging long-term trends in income, earnings, poverty, and wealth. The correction adjusts for substitution, new products, quality change, and new outlets.
  • The Cost of Thriving Has Fallen: Correcting and Rejecting the American Compass Cost of Thriving Index — The authors recalculate the Cost of Thriving Index and estimate the cost of supporting a family on one male earner's wages rose by just over 10 weeks of work rather than 22 weeks. Accounting for federal taxes—including the child tax credit—and quality improvements in health care and cars, they estimate the cost is now lower than in 1985.

AI Summary. Microsoft unveiled Majorana 1, a quantum chip built on a Topological Core architecture using a new materials stack of indium arsenide and aluminum, which the company expects will enable quantum computers capable of solving industrial-scale problems within years rather than decades. The topological superconductor produces a qubit that is fast, small, stable, and digitally controlled.

Catherine Bolgar Microsoft
Date Posted:

Microsoft introduced Majorana 1, the world’s first quantum chip powered by a new Topological Core architecture that it expects will realize quantum computers capable of solving meaningful, industrial-scale problems in years, not decades.

Can a new materials architecture make quantum computing practical sooner?

Core argument: Microsoft introduced Majorana 1, which it describes as the world's first quantum chip powered by a Topological Core architecture, and expects quantum computers able to solve industrial-scale problems in years rather than decades.

Microsoft introduced Majorana 1, the world’s first quantum chip powered by a new Topological Core architecture that it expects will realize quantum computers capable of solving meaningful, industrial-scale problems in years, not decades. This breakthrough required developing an entirely new materials stack made of indium arsenide and aluminum, much of which Microsoft designed and fabricated atom by atom. The topoconductor, or topological superconductor, is a special category of material that can create an entirely new state of matter – not a solid, liquid or gas but a topological state. This is harnessed to produce a more stable qubit that is fast, small and can be digitally controlled, without the tradeoffs required by current alternatives. A new paper published Wednesday in Nature outlines how Microsoft researchers were able to create the topological qubit’s exotic quantum properties and also accurately measure them, an essential step for practical computing.

Takeaways by Macro Roundup® AI

  1. Microsoft introduced Majorana 1, which it describes as the world's first quantum chip powered by a Topological Core architecture, and expects quantum computers able to solve industrial-scale problems in years rather than decades.
  2. Building Majorana 1 required an entirely new materials stack of indium arsenide and aluminum, much of which Microsoft designed and fabricated atom by atom to create a topoconductor supporting a topological state of matter.
  3. A paper published in Nature outlines how Microsoft researchers created the topological qubit's exotic quantum properties and accurately measured them, an essential step for practical computing, yielding a qubit that is fast, small and digitally controlled.

Related Articles:

  • Interferometric Single-Shot Parity Measurement In InAs–Al Hybrid Devices — Researchers demonstrated a single-shot interferometric measurement of fermion parity in indium arsenide–aluminium hybrid devices with a gate-defined superconducting nanowire, achieving a parity assignment error probability of 1%. The authors note the results admit both topologically trivial and non-trivial interpretations, and the architecture is compatible with future tests of anyon fusion rules.
  • Quantum Error Correction Below the Surface Code Threshold — Researchers report superconducting quantum processors running surface code memories below the error-correction threshold, with the logical error rate suppressed 2.14x per two-step increase in code distance and a 101-qubit code reaching 0.143% error per cycle. The logical memory outlived its best physical qubit by 2.4x.
  • Meet Willow, Our State-of-the-Art Quantum Chip — Google reports that its Willow quantum chip completed a random circuit sampling benchmark computation in under five minutes that one of today's fastest supercomputers would take an estimated 10^25 years to perform. The benchmark is described as the classically hardest test currently runnable on a quantum computer.

AI Summary. Researchers demonstrated a single-shot interferometric measurement of fermion parity in indium arsenide–aluminium hybrid devices with a gate-defined superconducting nanowire, achieving a parity assignment error probability of 1%. The authors note the results admit both topologically trivial and non-trivial interpretations, and the architecture is compatible with future tests of anyon fusion rules.

Microsoft Azure Quantum Nature
Date Posted:

Microsoft researchers document a technical breakthrough that could accelerate the development of scalable quantum computers.

Can fermion parity be measured in a single shot?

Core argument: A single-shot interferometric measurement of fermion parity in indium arsenide–aluminium heterostructures achieves an assignment error probability of 1%, enabled by a quantum-capacitance shift of up to 1 fF and a long poisoning time.

The fusion of non-Abelian anyons is a fundamental operation in measurement-only topological quantum computation. In one-dimensional topological superconductors (1DTSs) fusion amounts to a determination of the shared fermion parity of Majorana zero modes (MZMs). Here we introduce a device architecture that is compatible with future tests of fusion rules. We implement a single-shot interferometric measurement of fermion parity in indium arsenide–aluminium heterostructures with a gate-defined superconducting nanowire. The interferometer is formed by tunnel-coupling the proximitized nanowire to quantum dots. The nanowire causes a state-dependent shift of the quantum capacitance of these quantum dots of up to 1 fF. Our quantum-capacitance measurements show flux h/2e-periodic bimodality with a signal-to-noise ratio (SNR) of 1 in 3.6 μs at optimal flux values. From the time traces of the quantum-capacitance measurements, we extract a dwell time in the two associated states that is longer than 1 ms at in-plane magnetic fields of approximately 2 T. We discuss the interpretation of our measurements in terms of both topologically trivial and non-trivial origins. The large capacitance shift and long poisoning time enable a parity measurement with an assignment error probability of 1%.

Takeaways by Macro Roundup® AI

  1. A single-shot interferometric measurement of fermion parity in indium arsenide–aluminium heterostructures achieves an assignment error probability of 1%, enabled by a quantum-capacitance shift of up to 1 fF and a long poisoning time.
  2. Quantum-capacitance measurements in an interferometer formed by tunnel-coupling a gate-defined proximitized nanowire to quantum dots show flux h/2e-periodic bimodality with a signal-to-noise ratio of 1 in 3.6 μs at optimal flux values.
  3. Time traces of the quantum-capacitance measurements yield a dwell time in the two associated states longer than 1 ms at in-plane magnetic fields of approximately 2 T, and the authors discuss both topologically trivial and non-trivial interpretations.

Related Articles:

  • Microsoft’s Majorana 1 Chip Carves New Path for Quantum Computing — Microsoft unveiled Majorana 1, a quantum chip built on a Topological Core architecture using a new materials stack of indium arsenide and aluminum, which the company expects will enable quantum computers capable of solving industrial-scale problems within years rather than decades. The topological superconductor produces a qubit that is fast, small, stable, and digitally controlled.
  • Quantum Error Correction Below the Surface Code Threshold — Researchers report superconducting quantum processors running surface code memories below the error-correction threshold, with the logical error rate suppressed 2.14x per two-step increase in code distance and a 101-qubit code reaching 0.143% error per cycle. The logical memory outlived its best physical qubit by 2.4x.
  • Meet Willow, Our State-of-the-Art Quantum Chip — Google reports that its Willow quantum chip completed a random circuit sampling benchmark computation in under five minutes that one of today's fastest supercomputers would take an estimated 10^25 years to perform. The benchmark is described as the classically hardest test currently runnable on a quantum computer.

AI Summary. US electricity prices have risen at a compound annual rate of 5.7% over five years, after being roughly flat in the prior five years. Transformers could become a chokepoint: analysts estimate only about 20% of US transformer demand can be met domestically, with prices up 70%–100% on higher electrical steel and copper costs.

Jinjoo Lee Wall Street Journal
Date Posted:
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Prices for transformers have surged 70–100% since 2020, and US domestic supply meets just 20% of demand. New tariffs could further inflate transformer prices, worsening grid bottlenecks as AI data centers push demand higher.

How do transformer shortages and import costs drive electricity prices higher?

Core argument: U.S. electricity prices have risen at a 5.7% compound annual growth rate over the last five years, an acceleration from the preceding five years, when prices were roughly flat.

Nationwide, electricity prices have increased at a compound annual growth rate of 5.7% over the last five years, a considerable acceleration since the preceding five years when prices were roughly flat. The National Renewable Energy Laboratory estimates that about 55% of in-service distribution transformer units are older than 33 years and approaching their end of life. Distribution transformer capacity might need to increase 160% to 260% by 2050 compared with 2021 levels to meet demand, according to the NREL. Transformers could become a chokepoint. Only about 20% of transformer demand can be met by the domestic supply chain, according to Wood Mackenzie, which also estimated that transformer prices have already risen 70% to 100% since January 2020 because of inflation for raw materials such as electrical steel and copper. In 2024, China accounted for over 32% of U.S. low-voltage transformer equipment imports and Mexico accounted for 36% of high-voltage transformer imports, according to Wood Mackenzie. Canada accounted for about 16% of U.S. imports of high-voltage switchgear and 100% of imported utility poles.

Takeaways by Macro Roundup® AI

  1. U.S. electricity prices have risen at a 5.7% compound annual growth rate over the last five years, an acceleration from the preceding five years, when prices were roughly flat.
  2. Wood Mackenzie estimates only about 20% of U.S. transformer demand can be met by the domestic supply chain, with transformer prices already up 70% to 100% since January 2020 on raw material inflation in electrical steel and copper.
  3. The National Renewable Energy Laboratory estimates about 55% of in-service distribution transformer units are older than 33 years and approaching end of life, and that capacity may need to rise 160% to 260% by 2050 versus 2021 levels.

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  • Electricity 2025 — US electricity demand is projected to grow about 2% annually over 2025-2027, an upward revision from an earlier 1% forecast. A study commissioned by the US Department of Energy found data centre electricity use rose from about 60 TWh in 2014 to 176 TWh in 2023, and could reach 325-580 TWh by 2028.
  • World’s Largest Transformer Maker Warns of Supply Crunch — Hitachi Energy, the world's largest transformer maker, says the industry is overwhelmed and cannot keep pace with demand for grid equipment, with utilities that have not pre-reserved units now facing waits of three to four years versus six to eight months previously. Demand has been strained partly by data centres running generative artificial intelligence.
  • Grid Infrastructure Investments Drive Increase in Utility Spending Over Last Two Decades — Annual spending by major US utilities to produce and deliver electricity rose 12% over two decades to $320bn in inflation-adjusted terms, driven mainly by capital investment in infrastructure, which more than doubled. Capital spending on the distribution system that delivers power to end users increased 160%, or $31.4bn.

AI Summary. A study by 35 research teams found that glaciers in the Alps and Pyrenees lost about 40% of their volume in less than a quarter of a century. Excluding the Antarctic and Greenland ice sheets, glaciers elsewhere in the world lost 5% of their volume over roughly the same period.

Attracta Mooney and Steven Bernard Financial Times
Date Posted:

Glaciers, excluding the world’s largest in Greenland and the Antarctic, lost 5% of their volume over the past 25 years. Glaciers in the Alps and Pyrenees were most impacted, losing 40% of their volume over the past 25 years.

Have European glaciers lost more volume than glaciers elsewhere?

Core argument: Glaciers in the Alps and Pyrenees lost about 40% of their volume in less than a quarter of a century, according to a study published in Nature and carried out by 35 teams.

The study, carried out by 35 teams and published in the Nature, found that glaciers in the Alps and Pyrenees had lost about 40% of their volume in less than a quarter of a century. The research excluded the continental sheets of the Antarctic and Greenland, the world’s biggest ice masses, but concluded that glaciers in the rest of the world had lost 5% of their volume between 2000 and 2023.

Takeaways by Macro Roundup® AI

  1. Glaciers in the Alps and Pyrenees lost about 40% of their volume in less than a quarter of a century, according to a study published in Nature and carried out by 35 teams.
  2. Glaciers in the rest of the world, excluding the continental ice sheets of Antarctica and Greenland, lost 5% of their volume between 2000 and 2023, the study found.
  3. The Nature study excluded the Antarctic and Greenland ice sheets, the world's biggest ice masses, from its assessment of glacier volume loss.

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  • Take the Under — Downward revisions to global population and GDP projections make climate change appear more tractable, the author argues, since the scenarios used to model emissions rely on socio-economic assumptions that are more extreme than real-world observations. With slower population and economic growth, even partial policy successes could bring emissions consistent with a 2C target within reach.
  • Abrupt Reduction In Shipping Emission As An Inadvertent Geoengineering Termination Shock Produces Substantial Radiative Warming — Fuel regulations that abruptly cut sulfur dioxide emissions from international shipping by about 80% created an inadvertent geoengineering termination shock, and the authors estimate the resulting radiative forcing over the global ocean could double or more the rate of warming in the 2020s relative to the rate since 1980.
  • Accelerating Glacier Volume Loss On Juneau Icefield Driven By Hypsometry and Melt-Accelerating Feedbacks — Ice loss from Alaska's Juneau Icefield accelerated, with glacier volume loss of 0.65–1.01 km³ per year from 1770–1979 rising to 3.08–3.72 km³ from 1979–2010 and 5.91 ± 0.80 km³ from 2010–2020. The authors attribute the acceleration to rising snowline elevations and pervasive plateau thinning that trigger melt-accelerating feedbacks likely to inhibit future regrowth.