Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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 represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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 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


Friday, March 14, 2025

AI Summary. The share of Americans reporting they read a book in the past year has fallen below half, alongside declining performance in numeracy and problem-solving in most countries. The share of adults unable to use mathematical reasoning to evaluate the validity of statements averages 25% in high-income countries and 35% in the US.

John Burn-Murdoch Financial Times
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Citing PISA results @jburnmurdoch notes the share of adults in high income countries who can not “use mathematical reasoning when reviewing and evaluating the validity of statements” has risen from 20% in 2004 to 25% in 2023, and to 35% in the US.

Are reading, numeracy, and problem-solving skills declining across rich countries?

Core argument: In 2022, the share of Americans who reported reading a book in the past year fell below half, alongside declining performance in numeracy and other problem-solving in most countries.

In 2022, the share of Americans who reported reading a book in the past year fell below half. Particularly striking however is that we see this alongside decreasing performance in the application of numeracy and other forms of problem-solving in most countries. In one particularly eye-opening statistic, the share of adults who are unable to “use mathematical reasoning when reviewing and evaluating the validity of statements” has climbed to 25% on average in high-income countries, and 35% in the US. So we appear to be looking less at the decline of reading per se, and more at a broader erosion in human capacity for mental focus and application.

Takeaways by Macro Roundup® AI

  1. In 2022, the share of Americans who reported reading a book in the past year fell below half, alongside declining performance in numeracy and other problem-solving in most countries.
  2. The combination of falling reading rates and weaker numeracy and problem-solving performance suggests less a decline of reading itself than a broader erosion in human capacity for mental focus and application.

Related Articles:

  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • US PISA Results By Subpopulation — On the international PISA student assessments, American Asian and White students ranked at the top, American Hispanic students outscored Hispanic students elsewhere, and American Black students performed well. In reading, American Asian students placed first and American White students third.
  • TIMSS Shows the Bottom Is Falling Out for US Test Scores — US math scores on the international Trends in Mathematics and Science Study fell 18 points for fourth graders and 27 points for eighth graders, on a scale where about 30 points equates to a year of learning. Declines were concentrated among the lowest-performing students, with fourth-grade scores above the 75th percentile barely moving.

AI Summary. Between 1989–90 and 2019–20, the published sticker price of college rose $13,717 in real terms while net tuition paid by students after aid rose $4,526; net tuition received by institutions rose $8,128. The authors argue colleges captured increases in external aid such as Pell Grants rather than passing them to students.

Preston Cooper American Enterprise Institute
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Between 1990 and 2020, colleges raised tuitions and “captured increases in external financial aid, such as Pell Grants, instead of passing those increases through to students.” @PrestonCooper93

Do colleges capture financial aid increases instead of passing them along?

Core argument: The college sticker price rose $13,717 in real terms between 1989–90 and 2019–20, while net tuition paid by students after financial aid rose $4,526.

Taxpayers have dramatically increased financial aid spending. Unfortunately, colleges raised their prices even more, so the net tuition students pay still went up. Had colleges maintained tuition at 1989–90 levels, the increased generosity of financial aid from governments and other external actors would have delivered free tuition for the average public college student. The sticker price of college rose $13,717 in real terms between 1989–90 and 2019–20, the net tuition students pay after financial aid rose just $4,526. However, the net tuition received by institutions rose by a greater amount ($8,128). This is because institutions captured increases in external financial aid, such as Pell Grants, instead of passing those increases through to students. The NPSAS data series ends in 2019–20. However, higher education has seen remarkable developments since then. College enrollment dropped in the wake of the pandemic, which brought about reductions in real sticker prices.

Takeaways by Macro Roundup® AI

  1. The college sticker price rose $13,717 in real terms between 1989–90 and 2019–20, while net tuition paid by students after financial aid rose $4,526.
  2. Net tuition received by institutions rose $8,128 between 1989–90 and 2019–20, more than the increase students paid, because institutions captured increases in external aid such as Pell Grants instead of passing them through.
  3. Had colleges held tuition at 1989–90 levels, the increased generosity of financial aid from governments and other external actors would have delivered free tuition for the average public college student.

Related Articles:

  • PLUS or Minus? The Effect of Graduate School Loans on Access, Attainment, and Prices — The authors estimate that uncapping federal graduate student borrowing increased previously constrained students' borrowing and shifted their debt from private to federal sources, but had no effect on graduate enrollment, the racial and gender composition of entering students, human capital accumulation, or later earnings. They find the resulting increase in federal loans significantly raised program prices.
  • What Went Wrong with Federal Student Loans? — Weakened regulations on institutions enrolling aid-dependent students led to rising enrollment of disadvantaged students, but primarily at low-value institutions where loan performance deteriorated. Institutions in the lowest loan-repayment quintile had a 23% completion rate, $27,760 average post-enrollment earnings, and 20% default rates, versus 73%, $48,375, and 3% at the highest.
  • The Total Cost of Student Debt Cancellation — Recent US student debt cancellation policies are estimated to cost a combined $870bn to $1.4tn, with $620bn already implemented through an income-driven repayment program, interest cancellation during repayment pauses, and targeted discharges. The newest cancellation plan is preliminarily estimated to cost an additional $250bn to $750bn.

AI Summary. Benzodiazepines such as alprazolam, clonazepam, lorazepam, and diazepam are among the most commonly prescribed psychiatric medications in America, with nearly 24m Americans using them and more than 86m prescriptions written in a year. The Food and Drug Administration has required manufacturers to warn of serious risks of abuse, physical dependence, and withdrawal reactions.

Shalini Ramachandran and Betsy McKay Wall Street Journal
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Over the past six decades, hundreds of millions of Americans have taken anti-anxiety medications like Xanax, including over 30mm in 2015. Usage dropped to 24mm in 2023, or 7% of Americans.

Do widely prescribed anti-anxiety drugs carry serious risks of dependence?

Core argument: Nearly 24 million Americans use benzodiazepines, and more than 86 million prescriptions were written last year, according to the IQVIA Institute for Human Data Science.

Over the past six decades, hundreds of millions of people have taken Xanax (the brand name for alprazolam) or one of its cousins in the benzodiazepine family—Klonopin (clonazepam); Ativan (lorazepam); and Valium (diazepam)—to lull them to sleep or deliver instant calm in an age of abiding anxiety. Psychiatrists and primary-care doctors regularly prescribe the drugs for everything from mild anxiety to insomnia, making benzodiazepines some of the most commonly prescribed psychiatric medications in America. After a rise in complaints, in 2020 the FDA required drug manufacturers to add a warning on benzodiazepines about the serious risks of abuse, physical dependence and withdrawal reactions. But nearly 24 million Americans are still using them. More than 86 million prescriptions were written last year, according to the IQVIA Institute for Human Data Science.

Takeaways by Macro Roundup® AI

  1. Nearly 24 million Americans use benzodiazepines, and more than 86 million prescriptions were written last year, according to the IQVIA Institute for Human Data Science.
  2. The FDA in 2020 required drug manufacturers to add a warning on benzodiazepines about the serious risks of abuse, physical dependence and withdrawal reactions, following a rise in complaints.
  3. Psychiatrists and primary-care doctors prescribe Xanax, Klonopin, Ativan and Valium for conditions ranging from mild anxiety to insomnia, making benzodiazepines among the most commonly prescribed psychiatric medications in America.

Related Articles:

  • Declining Life Satisfaction and Happiness Among Young Adults in Six English-speaking Countries — Eleven studies find declines in life satisfaction and happiness among young adults in the US, Australia, Canada, Ireland, New Zealand, and the UK. In these countries life satisfaction now rises with age across the lifespan, as young people's life satisfaction dropped sharply while that of people 45 and over stayed flat.
  • The Girls Are Not Alright: Responses to Three Claims that the Youth Mental Health Crisis Is Exaggerated — U.S. Centers for Disease Control data on nonfatal self-harm show a 518% increase in hospitalizations following emergency department visits among girls aged 10–14, with a large rise also among girls aged 15–19. Because suicide deaths vary by sex and age, low suicide rates among teen girls do not mean teen girls are not struggling.
  • Young Americans are Getting Happier — Data from seven surveys of mental health and well-being, along with reported suicide rates, show teens and young adults in the US improving on every measure in recent years. The share of young adults reporting weekly depression fell from 16.5% to 13.3%, though it remains well above pre-pandemic levels.

AI Summary. US population growth is concentrating in suburban counties rather than urban cores: Texas's Harris and Dallas counties gained residents through international migration and births while losing tens of thousands to domestic outmigration, as surrounding suburban counties recorded large domestic inflows. Census Bureau data show 65.3% of US counties grew, with large suburban counties expanding fastest.

Aziz Sunderji Home Economics
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.@AzizSunderji argues that US “population growth is increasingly concentrated in suburban counties surrounding major metropolitan areas, not in the urban cores themselves,” particularly Sunbelt suburbs.

Are suburban counties outgrowing urban cores in US population growth?

Core argument: Harris County (central Houston) gained 101,126 residents through international migration and 35,833 through natural increase while losing 31,165 to domestic outmigration, and Dallas County added 47,564 internationally and 19,625 naturally while losing 47,168 domestically.

Population growth is increasingly concentrated in suburban counties surrounding major metropolitan areas, not in the urban cores themselves. In Texas, for example, our county-level analysis shows striking differences between urban core counties and their suburbs: Harris County (central Houston) gained 35,833 residents through natural increase and 101,126 through international migration, but lost 31,165 to domestic outmigration. Dallas County (central Dallas) added 19,625 through natural change and 47,564 internationally, but lost a substantial 47,168 domestically. But both of these cities are ringed by fast-growing suburban counties: Kaufman County (Dallas suburbs) saw modest natural growth (1,447) and international migration (588), but explosive domestic in-migration (9,158) – representing nearly 5% of its population in a single year. Montgomery County (Houston suburbs) gained 3,956 through natural increase, 6,480 internationally, and a staggering 23,919 domestically (3.34% of its population). This suburban preference is consistent throughout the country. Census Bureau data shows 65.3% of all U.S. counties grew last year, with large suburban counties showing the fastest rates of expansion.

Takeaways by Macro Roundup® AI

  1. Harris County (central Houston) gained 101,126 residents through international migration and 35,833 through natural increase while losing 31,165 to domestic outmigration, and Dallas County added 47,564 internationally and 19,625 naturally while losing 47,168 domestically.
  2. Kaufman County in the Dallas suburbs gained 9,158 domestic in-migrants, nearly 5% of its population in a single year, against 1,447 from natural growth and 588 internationally.
  3. Census Bureau data show 65.3% of U.S. counties grew last year, with large suburban counties expanding fastest; Montgomery County outside Houston added 23,919 domestic migrants, 3.34% of its population.

Related Articles:

  • Cities Aren’t Back — The share of college-educated 25-34 year-olds without school-age children living in urban neighborhoods fell from 39.2% to 37.0%, a steeper decline than for the population overall, according to the American Community Survey. The urban share of top-10% income households held roughly flat at about 30%, a change from earlier steady increases.
  • Young Families Have Continued Leaving Big Cities Post-Pandemic — Large urban counties have continued to lose population of young children even as their overall population growth resumed, driven by immigration. Birth rates in large urban counties have declined twice as fast as in rural counties over the past decade, and the number of children under five fell in 58% of all US counties.
  • Snow Belt to Sun Belt Migration: End of an Era? — The correlation between US county population growth or net migration and historical extreme heat and cold days has declined over roughly the past 50 years, and in 2010–2020 was essentially zero. The authors argue this pivoting is likely to continue and reverse the 20th-century Snow Belt to Sun Belt migration pattern.

AI Summary. Gold has risen above $3,000 an ounce, a 10-fold gain over the past quarter century that outpaces the roughly 4-fold rise in the S&P 500 index of US stocks. Anticipation of tariffs pushed US gold prices above international benchmarks, drawing more than 23m ounces worth about $70bn into New York's Comex depositories.

Jack Ryan, Sybilla Gross, and Yvonne Yue Li Bloomberg
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Gold prices broke $3,000 per ounce for the first time, driven by central bank purchases and investors’ perceived flight to safety. Gold remains well under its 1980s all-time real peak of $3,800/oz.

Has gold outperformed US stocks over the past quarter century?

Core argument: Gold broke through $3,000 an ounce, with the price up 10-fold over the last quarter century, outperforming the S&P 500, which quadrupled over the same period.

The move through the psychological $3,000 level drives home gold’s centuries-old role as a store of value in turbulent times and as a gauge of fear in markets. In the last quarter century, the price has risen 10-fold, outperforming even the S&P 500, the benchmark for US stocks, which quadrupled over the same period. As traders braced for tariffs, US prices for gold surged above other international benchmarks, prompting dealers to rush bullion into America in large volumes before the levies come into force. More than 23 million ounces of gold, worth about $70 billion, flowed into the depositories of New York’s Comex futures exchange between election day and March 12. The influx has been so vast that it helped drive the US trade deficit to a record in January.

Takeaways by Macro Roundup® AI

  1. Gold broke through $3,000 an ounce, with the price up 10-fold over the last quarter century, outperforming the S&P 500, which quadrupled over the same period.
  2. More than 23 million ounces of gold worth about $70 billion flowed into the depositories of New York's Comex futures exchange between election day and March 12, as US prices surged above other international benchmarks ahead of tariffs.
  3. The influx of bullion into the US helped drive the US trade deficit to a record in January.

Related Articles:

  • Taking Stock: Dollar Assets, Gold, and Official Foreign Exchange Reserves — Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly its level in the early 2000s. International Monetary Fund country data indicate most added official gold holdings came from a few central banks, with over half of reported accumulation from China and Russia and about a quarter from several emerging markets.
  • Rich Countries Plan to Buy More Gold Despite Record Price — A World Gold Council survey finds almost 60% of advanced-economy central banks expect gold's share of global reserves to rise over the next five years at the expense of the US dollar, up from 38% a year earlier. About 13% plan to increase their own gold holdings within a year, the highest share recorded in the survey.

AI Summary. US shipyards had just five commercial ships under construction compared with 1,749 in China, and China's naval fleet is projected to grow from 370 to 475 vessels in a decade versus 297 to between 305 and 317 for the US Navy, whose major shipbuilding programs are behind schedule.

Christian Davies, Song Jung-a in and Harry Dempsey Financial Times
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South Korean shipbuilders’ stocks have surged on indications the US may outsource components of naval maintenance and shipbuilding while Trump “seeks to revive his country’s moribund shipbuilding industry.”

Can allied shipyards help close the naval shipbuilding gap with China?

Core argument: US shipyards had just five ships under construction in 2023 versus 1,749 in China, according to the Congressional Research Service.

Asian shipbuilders have been buoyed by indications that US President Donald Trump may be willing to outsource the production of naval vessels while he seeks to revive his country’s moribund shipbuilding industry. “We need ships, and we may have to go a different route than you would normally go,” Trump said during a radio appearance ahead of his inauguration in January. “We may have to go to others, bid them out, and it’s OK to do that. We’ll bid them out until we get ourselves ready.”US shipyards had just five ships under construction in 2023, according to the Congressional Research Service, compared with 1,749 in China. Meanwhile, China’s naval fleet is projected to increase from 370 vessels to 475 in a decade. The US Navy’s ageing fleet is only forecast to increase from 297 to between 305 and 317 over the same period, with all its major shipbuilding programmes behind schedule, according to the US defence department.

Takeaways by Macro Roundup® AI

  1. US shipyards had just five ships under construction in 2023 versus 1,749 in China, according to the Congressional Research Service.
  2. China's naval fleet is projected to grow from 370 to 475 vessels in a decade, while the US Navy's ageing fleet is forecast to rise only from 297 to between 305 and 317, with all major US shipbuilding programmes behind schedule, according to the US defence department.
  3. Trump said the US may bid out naval vessel production to others until it is ready, remarks that have buoyed Asian shipbuilders.

Related Articles:

  • Ship Wars — Shipyards tied to China's defense industrial base account for 15% of the country's active shipyards but 40% of commercial output by tonnage, with over 75% of their production built for firms outside China and Hong Kong. The authors argue these commercial revenues offset fixed costs and effectively subsidize China's naval expansion.
  • China’s Shipyards Are Ready for a Protracted War. America’s Aren’t — China produced more than half of the world's commercial shipbuilding output, while Europe accounts for about 5% and the US next to nothing, with most of the remainder built in South Korea and Japan. Analysts argue that in a protracted conflict China's wartime-scale yards could quickly accelerate production, replace lost ships, and repair damaged ones.
  • The Hidden Threat to National Security Is Not Enough Workers — At Newport News Shipbuilding, half of welders now have less than four years' experience, down from an average of 20 years three decades ago, and inexperience reduces productivity and adds delays. Shipbuilding wages starting at $17 an hour no longer carry a premium over local retail and warehouse jobs paying up to $24.

Monday, March 17, 2025

AI Summary. The authors define "good jobs" as those in industries paying a wage premium and find spatial convergence across US local labor markets: areas initially less specialized in good-job industries saw larger increases in that specialization. This convergence was most consequential for Black, Hispanic, and foreign-born workers, who were overrepresented in fast-converging Southern and Western cities.

Gordon Hanson and Enrico Moretti University of California
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“Good jobs” in industries that pay wage premiums became increasingly dispersed across US commuting zones over 1980-2021, find Hanson and Moretti, moving towards the South and the West, particularly benefiting Blacks, Hispanics, and immigrants.

Has the geography of high-paying jobs converged across US local labor markets?

Core argument: Between 1980 and 2021, U.S. commuting zones that were initially less specialized in "good jobs" — industries paying a positive wage premium after accounting for individual and regional characteristics — saw larger gains in such specialization, a pattern of spatial convergence.

[We define “good jobs” as those] in industries that pay a positive wage premium relative to other sectors, accounting for individual and regional characteristics. The evolution of CZ [Commuting Zone] specialization in good jobs presents a clear picture of spatial convergence: between 1980 and 2021, specialization in good jobs increased by more in CZs that were initially less specialized in good job industries. Spatial convergence in the specialization of good jobs was most consequential for Black, Hispanic, and foreign-born workers. Relative to the national average, these groups were overrepresented in Southern and Western cities that have experienced some of the fastest rates of convergence in good job specialization. As a consequence, the parts of the US that are rich in good jobs today look vastly different than those in 1980: they are more centered around human-capital-intensive tradable services, are surrounded by larger concentrations of low-wage, non-tradable service industries, and are more demographically diverse.

Takeaways by Macro Roundup® AI

  1. Between 1980 and 2021, U.S. commuting zones that were initially less specialized in "good jobs" — industries paying a positive wage premium after accounting for individual and regional characteristics — saw larger gains in such specialization, a pattern of spatial convergence.
  2. Spatial convergence in good-job specialization was most consequential for Black, Hispanic, and foreign-born workers, who were overrepresented relative to the national average in Southern and Western cities with some of the fastest convergence rates.
  3. The U.S. areas rich in good jobs today are centered more on human-capital-intensive tradable services, surrounded by larger concentrations of low-wage non-tradable service industries, and more demographically diverse than in 1980.

Related Articles:

  • The World’s Rust Belts: The Heterogeneous Effects of Deindustrialization on 1,993 Cities in Six Countries — A study of 1,993 cities in France, Germany, Italy, Japan, the UK and the US finds former manufacturing hubs lost employment on average after each country's manufacturing peak, though a large share fully recovered. After the peak, hubs with a higher initial share of college-educated workers grew significantly faster.
  • Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization — 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.
  • 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.

AI Summary. U.S. Border Patrol apprehensions of people crossing the southern border illegally have fallen to about 8,300 a month, down from a record of more than 225,000 in a single month. Crossings through the Darién Gap, the land bridge between South and Central America, fell to 408 from more than 37,000 a year earlier.

Simon Romero and Paulina Villegas New York Times
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February apprehensions at the southern border were down over 80% from December to 8,347, as the Trump administration’s new border policy came into effect. If the current trend holds, apprehensions could fall to levels unseen since ~ 1967.

Have hard-line enforcement tactics sharply reduced illegal border crossings?

Core argument: Adam Isacson of the Washington Office on Latin America says that if February's pace holds for a full year, U.S. migrant apprehensions could fall to levels unseen since around 1967.

In February, the U.S. Border Patrol said it had apprehended 8,347 people trying to illegally cross the border, down from a record high of more than 225,000 apprehensions in December 2023. Those numbers had already been dropping sharply since the Biden administration unveiled its immigration restrictions last year. In December, the final full month Mr. Biden was in office, the Border Patrol apprehended 47,330 migrants at the U.S.-Mexico border. If that trend holds for a full year, migrant apprehensions in the United States could fall to levels unseen since around 1967, according to Adam Isacson, a migration expert at the Washington Office on Latin America. There are signs that figures are plummeting farther south in the region, too. The number of people trying to reach the United States through the Darién Gap — the forbidding land bridge connecting South America and Central America that is a barometer of future pressure at the U.S.-Mexico border — dropped to 408 in February, down from more than 37,000 in the same month last year, according to Panama’s Immigration Institute.

Takeaways by Macro Roundup® AI

  1. Adam Isacson of the Washington Office on Latin America says that if February's pace holds for a full year, U.S. migrant apprehensions could fall to levels unseen since around 1967.
  2. Crossings of the Darién Gap, the land bridge between South America and Central America that serves as a barometer of future pressure at the U.S.-Mexico border, fell to 408 in February from more than 37,000 a year earlier, according to Panama's Immigration Institute.
  3. The U.S. Border Patrol apprehended 8,347 people crossing the border illegally in February, down from 47,330 in December, Mr. Biden's final full month in office, and a record of more than 225,000 in December 2023.

Related Articles:

  • Recent Immigration Surge Has Been Largest in U.S. History — An analysis of government data finds the recent U.S. immigration surge is the largest on record, with net migration averaging 2.4m people a year from 2021 to 2023 and the foreign-born share of the population reaching 15.2% in 2023, up from 13.6% in 2020. About 60% of immigrants arriving since 2021 entered without legal authorization.
  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • Two New Estimates of the Fiscal Impact of Immigration — Estimates of immigrants' fiscal impact depend heavily on the assumptions used: the lifetime fiscal impact of a 22-year-old high school dropout shifts from negative $315,000 under one set of assumptions to a small negative number under another. The author argues the accounting approach common in this literature understates immigrants' contribution to fiscal sustainability.

AI Summary. University of Michigan survey data show consumer sentiment declining for households earning both above and below $100,000, with job-loss worries at levels typically seen in recessions and a record-high share of consumers saying business conditions are worsening. Income expectations are falling while inflation expectations are rising rapidly.

Torsten Sløk Apollo
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The March Michigan Survey of Consumers shows both consumer sentiment and employment expectations deteriorating “at an alarming rate.” Torsten Sløk notes, “Consumer worries about losing their jobs are at levels normally seen during recessions.”

Is consumer sentiment declining rapidly across income levels?

Core argument: The University of Michigan's March consumer sentiment survey shows sentiment declining rapidly among households earning both above and below $100,000, with a record-high share of consumers saying business conditions are worsening.

The March survey of consumer sentiment from the University of Michigan shows the following: Consumer sentiment is declining rapidly both for households making more than $100,000 and less than $100,000. Consumer worries about losing their jobs are at levels normally seen during recessions. A record-high share of consumers think business conditions are worsening. Households’ income expectations are declining. Inflation expectations are rising at an unprecedented speed. The bottom line is that consumer sentiment is deteriorating at an alarming rate.

Takeaways by Macro Roundup® AI

  1. The University of Michigan's March consumer sentiment survey shows sentiment declining rapidly among households earning both above and below $100,000, with a record-high share of consumers saying business conditions are worsening.
  2. Consumer worries about job loss in the March University of Michigan survey stand at levels normally seen during recessions, while households' income expectations are declining.
  3. Inflation expectations in the March University of Michigan survey are rising at an unprecedented speed, part of a broader deterioration in consumer sentiment.

Related Articles:

  • How Do Electoral Votes, Presidential Approval, and Consumer Sentiment Respond to Economic Indicators? — The authors estimate that unemployment, current inflation, and a set of noneconomic factors explain much of the variation in US presidential approval ratings since 1956, with the economic indicators' combined contribution almost always negative. Once noneconomic effects are included, the Michigan Consumer Sentiment Index loses its advantage over the economic variables.
  • 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%.
  • It’s No Longer The Economy, Stupid — The long-standing link between economic sentiment and government popularity has disappeared in the US while remaining strong in France and Germany and, to a lesser degree, the UK. The author attributes this decoupling to hyper-partisanship, arguing that American voters' political allegiances now shape their economic perceptions rather than the reverse.

AI Summary. European leaders are debating raising defence spending to 3.5% of GDP or more, a level not seen in continental Europe since the late 1960s. Sustaining that share from 1995 to 2023 would have required an extra $387bn a year across EU member states and $35bn a year for the UK, according to Financial Times calculations.

Valentina Romei, Sam Fleming, and Alan Smith Financial Times
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Raising EU defense spending to 3.5% of GDP from 1995-2023 “would have required EU member states to allocate an extra $387B/year.” Defense increases will likely require cuts in social protection, which rose from 36.6% of EU GDP in 1995 to 41.4% in 2020.

What would higher defense spending have cost Europe annually?

Core argument: European leaders are debating defence spending of as much as 3.5% of GDP or higher over the coming decade, a level not seen in continental Europe since the late 1960s.

European leaders are openly debating lifting spending to as much as 3.5% of GDP or higher in the coming decade, a level not seen in continental Europe since the late 1960s. Spending at this level between 1995 and 2023 would have required EU member states to allocate an extra $387bn a year to defence, according to FT calculations based on 2020 purchasing power parity (PPP) dollars. The uplift for the UK, which spent 2.3% of GDP on defence in 2023, would have been $35bn per year over the same period — roughly equivalent to annual public spending on housing and local amenities. Across the EU, social protection has grown as a share of total government spending, rising from 36.6% in 1995 to 41.4% on the eve of the pandemic, according to Eurostat.

Takeaways by Macro Roundup® AI

  1. European leaders are debating defence spending of as much as 3.5% of GDP or higher over the coming decade, a level not seen in continental Europe since the late 1960s.
  2. Spending at 3.5% of GDP between 1995 and 2023 would have required EU member states to allocate an extra $387bn a year to defence, according to FT calculations in 2020 PPP dollars.
  3. The UK, which spent 2.3% of GDP on defence in 2023, would have needed an additional $35bn a year between 1995 and 2023, roughly equivalent to annual public spending on housing and local amenities, according to FT calculations.

Related Articles:

  • German Borrowing Costs Soar By Most Since 1997 on ‘Historic’ Debt Deal — Germany's incoming governing partners agreed to exempt defense spending above 1% of GDP from the constitutional borrowing limit, create a €500bn off-budget vehicle for debt-funded infrastructure, and loosen borrowing rules for states. Goldman Sachs estimated the package could lift German growth to as much as 2%, versus its 0.8% forecast, if approved and implemented quickly.
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AI Summary. The authors argue that in a financial system where capital flows drive trade flows, a U.S. sovereign wealth fund investing abroad at scale would force surplus countries' domestic economies to adjust to those inflows. They contend this creates negotiating leverage for a multilateral currency realignment agreement, backed by the threat of losing privileged access to U.S. markets.

Michael McNair Medium
Date Posted:

.@michaeljmcnair argues that a proposed US Sovereign Wealth Fund would “monetize the asset side of the US balance sheet” and fund foreign asset purchases to weaken the dollar, making imports more expensive and US exports more competitive.

Can a U.S. sovereign wealth fund pressure surplus countries to rebalance trade?

Core argument: In the global financial system, capital flows often determine trade flows rather than the reverse, and foreign capital inflows have shaped U.S. conditions by inflating asset prices and suppressing savings, the authors argue.

In today’s global financial system, it’s often capital flows that determine trade flows, rather than the other way around. Just as foreign capital inflows have shaped U.S. economic conditions by inflating asset prices and suppressing savings, U.S. capital outflows through the SWF would reshape conditions in recipient economies. Their domestic variables must adjust to accommodate these flows, regardless of local policy preferences. By forcing surplus countries to either accept reciprocal flows or lose privileged access to U.S. markets, the SWF creates leverage for restructuring the global financial architecture that has long advantaged surplus countries at U.S. expense. The SWF provides the administration with powerful leverage in pursuing a multilateral agreement for currency realignment — what we’ve called a potential “Mar-a-Lago Accord.” By demonstrating both the capability and willingness to accumulate foreign reserves at scale, the U.S. gains crucial negotiating leverage with surplus countries.

Takeaways by Macro Roundup® AI

  1. In the global financial system, capital flows often determine trade flows rather than the reverse, and foreign capital inflows have shaped U.S. conditions by inflating asset prices and suppressing savings, the authors argue.
  2. U.S. capital outflows through a sovereign wealth fund would reshape conditions in recipient economies, whose domestic variables must adjust to accommodate those flows regardless of local policy preferences, according to the authors.
  3. By forcing surplus countries to accept reciprocal flows or lose privileged access to U.S. markets, the sovereign wealth fund creates leverage for a multilateral currency realignment the authors call a potential "Mar-a-Lago Accord.".

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  • 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.
  • 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.
  • What Is the Mar-a-Lago Accord? — The proposed Mar-a-Lago Accord would have the US offer allies security guarantees and market access in exchange for their intervening to weaken the dollar, expanding US manufacturing, and swapping existing US government debt for new 100-year Treasury bonds. Questions remain about the transition costs, inflation from higher US wage costs, and allies' incentives to participate.

AI Summary. Sustainably weakening the dollar would require the Federal Reserve to cut interest rates while foreign central banks raise theirs, which is unlikely given US inflation above the Federal Reserve's 2% target and weak foreign economies. Tariff threats and security-umbrella pressure might sway Japan and Europe, but China would be less willing to comply.

Steven Kamin and Mark Sobel Financial Times
Date Posted:

A “Mar-a-Lago Accord” that forced foreign investors “to ‘reprofile’ into 100-year zero coupon bonds” would end Treasuries’ role as the bedrock of the global financial system, and “would not succeed.” @steven_kamin @sobel_mark

Can a negotiated agreement sustainably weaken the dollar?

Core argument: A sustained dollar depreciation would require the Federal Reserve to cut rates and foreign central banks to raise theirs, which will not happen while US inflation exceeds the Fed's 2% target and foreign economies languish.

The plan would not succeed. As countless studies have shown, pushing the dollar down on a sustained basis would require the Federal Reserve to lower interest rates and foreign central banks to raise rates; but with US inflation stubbornly exceeding the Fed’s 2% target and foreign economies languishing, that’s not going to happen. By the same token, if foreign governments were busy selling Treasury bonds in order to depress the dollar, it’s unlikely that increasing the duration of their remaining dollar bonds could be enough to keep US interest rates from rising. And while threats of higher tariffs and ejection from the security umbrella might coerce Japan and Europe to play ball, China — which should be America’s main concern — is going to be less willing to kowtow to Trump.

Takeaways by Macro Roundup® AI

  1. A sustained dollar depreciation would require the Federal Reserve to cut rates and foreign central banks to raise theirs, which will not happen while US inflation exceeds the Fed's 2% target and foreign economies languish.
  2. If foreign governments sold Treasury bonds to depress the dollar, lengthening the duration of their remaining dollar holdings would be unlikely to prevent US interest rates from rising.
  3. Threats of higher tariffs and ejection from the US security umbrella might coerce Japan and Europe into cooperating, but China, which should be America's main concern, would be less willing to comply.

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.
  • What Is the Mar-a-Lago Accord? — The proposed Mar-a-Lago Accord would have the US offer allies security guarantees and market access in exchange for their intervening to weaken the dollar, expanding US manufacturing, and swapping existing US government debt for new 100-year Treasury bonds. Questions remain about the transition costs, inflation from higher US wage costs, and allies' incentives to participate.
  • Budget Cuts Can Solve Trump’s Trade Deficit Problem — An International Monetary Fund study of 33 countries found that for a large economy like the U.S., each dollar of deficit reduction shifts the current account—trade in goods, services and investment income—by 30 to 50 cents. Applying that math, cutting the U.S. federal deficit from 6.4% of GDP to 3% would trim $300bn–$500bn from the roughly $900bn goods-and-services trade deficit.

AI Summary. The Covid-19 pandemic left a visible break — a spike, dip, or jolt — in data series across the economy, health care, education, work, and family life that will remain identifiable in historical records for decades.

Aatish Bhatia and Irineo Cabreros New York Times
Date Posted:
Is Database:
Database

As of 2023, the amount of time Americans spend socializing with others remains 20% below 2015 levels.

Did the pandemic leave a lasting mark across economic and social data?

Core argument: A collection of 30 charts shows the Covid pandemic, which officially began for Americans five years ago this week, as an unmistakable spike, dip or jolt across the economy, health care, education, work and family life.

Decades from now, the pandemic will be visible in the historical data of nearly anything measurable today: an unmistakable spike, dip or jolt that officially began for Americans five years ago this week. Here’s an incomplete collection of charts that capture that break — across the economy, health care, education, work, family life, and more.

Takeaways by Macro Roundup® AI

  1. A collection of 30 charts shows the Covid pandemic, which officially began for Americans five years ago this week, as an unmistakable spike, dip or jolt across the economy, health care, education, work and family life.
  2. The pandemic's break in the data will remain visible decades from now in the historical record of nearly anything measurable today.

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  • Declining Life Satisfaction and Happiness Among Young Adults in Six English-speaking Countries — Eleven studies find declines in life satisfaction and happiness among young adults in the US, Australia, Canada, Ireland, New Zealand, and the UK. In these countries life satisfaction now rises with age across the lifespan, as young people's life satisfaction dropped sharply while that of people 45 and over stayed flat.
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