Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, April 16, 2025

AI Summary. Following a sweeping US tariff announcement, the dollar's effective exchange rate depreciated rather than appreciating as standard international macroeconomic models predict: all G10 currencies gained against the dollar while the most freely floating emerging market currencies gained less or fell. The authors read this as advanced economies rebalancing away from dollar assets.

Jonathan Hartley and Alessandro Rebucci Center for Economic and Policy Research
Date Posted:

Post “Liberation Day,” the dollar has fallen against advanced economy currencies, whereas emerging market currencies depreciated against the dollar, suggesting “foreign advanced economies reduced exposure to US dollar-denominated assets.”

Why did the dollar weaken after new tariffs instead of strengthening?

Core argument: The dollar's effective exchange rate sharply depreciated following the Liberation Day tariff announcement, contrary to the prediction of standard international macroeconomic models and the evidence from the first Trump tariffs.

Contrary to the prediction of standard international macroeconomic models and the evidence from the first Trump tariffs, on Liberation Day the dollar effective exchange rate sharply depreciated rather than appreciating. Unpacking the impact on broad dollar indexes by looking at the reaction of the main bilateral pairs reveals a striking divergence in currency responses Figure 2 plots the daily change in the bilateral exchange rate against the tariff rates announced on Liberation Day. The figure shows that all G10 currencies appreciated against the US dollar in the 24 hours following the announcement, meaning the dollar weakened against those currencies. In contrast, the most floating emerging market currencies either appreciated less or depreciated against the dollar. The strong appreciation of the G10 currencies implies that that foreign advanced economies reduced exposure to US dollar-denominated assets, selling dollars in favour of other major currencies to rebalance their portfolios, as trade flows cannot adjust instantaneously.

Takeaways by Macro Roundup® AI

  1. The dollar's effective exchange rate sharply depreciated following the Liberation Day tariff announcement, contrary to the prediction of standard international macroeconomic models and the evidence from the first Trump tariffs.
  2. All G10 currencies appreciated against the US dollar in the 24 hours after the Liberation Day announcement, while the most floating emerging market currencies either appreciated less or depreciated against the dollar.
  3. The strong G10 appreciation implies that foreign advanced economies reduced exposure to US dollar-denominated assets, selling dollars for other major currencies to rebalance portfolios, as trade flows cannot adjust instantaneously.

Related Articles:

  • The World’s Reserve Currency Gets a Sharp Shock — After broad-based US tariffs were announced, stock prices fell, volatility jumped and Treasury yields rose — conditions that normally lift the dollar as a haven — yet the dollar fell instead. Relative to a simple econometric model, the dollar's decline was the largest prediction error in four years.
  • Dollar Downgrade — The author argues that rising 10- and 30-year US Treasury yields do not show up in long-term inflation expectations, judging by the spread between inflation-indexed and non-indexed Treasury bonds. The author attributes the increase instead to a shift in demand away from long-dated US debt, reinforcing higher long-term real interest rates.
  • The Great European Disentanglement From US Stocks Has Only Just Started — Federal Reserve data show European investors held about $9tn in US stocks, roughly 17% of the total value of the US market. After inflation, a dollar invested in the US at the start of 2000 was worth $3.28 by the end of 2024, versus $1.63 for the rest of the world.

AI Summary. The S&P 500 has returned -7.9% including dividends while Europe's Stoxx Europe 600 returned 10% in dollar terms. On price-earnings ratios, European stocks trade almost 30% below US stocks, a wider gap than the roughly 17% average discount of the past two decades.

Alice Gledhill, Abhinav Ramnarayan, and Julien Ponthus Bloomberg
Date Posted:

European stocks still trade at a discount to American equities; Stoxx Europe 600 trades at a ~30% P/E discount to the S&P 500, “much wider than the average 17% discount going back a couple decades.”

Are European stocks outperforming US stocks while still trading at wider discounts?

Core argument: The S&P 500 is down 7.9% this year including dividends, while the Stoxx Europe 600 Index has returned 10% in dollar terms.

The S&P 500 is down 7.9% this year including dividends, versus a 10% return in dollar terms for the Stoxx Europe 600 Index. Yet, judging by price-earnings ratios, European stocks still look like a bargain: They’re almost 30% cheaper than the US, much wider than the average 17% discount going back a couple decades.

Takeaways by Macro Roundup® AI

  1. The S&P 500 is down 7.9% this year including dividends, while the Stoxx Europe 600 Index has returned 10% in dollar terms.
  2. European stocks trade almost 30% cheaper than US stocks on price-earnings ratios, a discount wider than the 17% average going back a couple of decades.

Related Articles:

AI Summary. A recession would lower long-term interest rates and cut US government interest costs by roughly $500bn annually if rates fell two percentage points, but the historical recession-driven widening of the deficit of about 4% of GDP would erode government finances by an additional $1.3tn in 2025 dollars. Deliberately inducing a recession therefore cannot improve the budget deficit.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk estimates that in the event of a recession that generates a 200 bps decline in interest rates, the cost of debt service would decline by $568 billion, while lower tax receipts and higher UI payments would cost the government $1.3 trillion.

Can inducing a recession reduce the budget deficit through lower interest rates?

Core argument: A two-percentage-point decline in interest rates would save the US government around $500 billion in annual interest payments, but a recession would deteriorate government finances by about double that amount.

If the US enters a recession, long-term interest rates are likely to go down, and it would be cheaper for the US government to refinance existing government debt. However the interest payments saved if interest rates decline by two percentage points would be more than offset by the deterioration in government finances associated with a recession. Specifically, if interest rates decline by two percentage points, the US government would save around $500 billion in annual interest payments. But if the US enters a recession, the government will have lower tax collections and pay more in unemployment benefits, and the historical deepening of the budget deficit during recessions of around 4% of GDP would correspond to an additional $1.3 trillion erosion of US government finances measured in 2025 dollars. The bottom line is that it is not possible to improve the budget deficit by creating a recession because during a recession government finances would deteriorate by double the amount saved in interest payments.

Takeaways by Macro Roundup® AI

  1. A two-percentage-point decline in interest rates would save the US government around $500 billion in annual interest payments, but a recession would deteriorate government finances by about double that amount.
  2. Recessions have historically deepened the US budget deficit by around 4% of GDP, corresponding to an additional $1.3 trillion erosion of government finances in 2025 dollars through lower tax collections and higher unemployment benefits.
  3. Creating a recession cannot improve the US budget deficit, because the fiscal deterioration during a downturn exceeds the interest savings from lower long-term rates.

Related Articles:

  • Bear Market Anatomy – The Path and Shape of the Bear Market — Cyclical and event-driven bear markets have both averaged declines of roughly 30%, but cyclical ones last about two years and take five to recover, versus about eight months and one year for event-driven; structural bear markets average 60% declines over three-plus years and take a decade to recover.
  • Consumer Confidence Is Weaker than During the 2008 Financial Crisis — The University of Michigan survey of consumers shows sentiment declining among households earning both above and below $100,000, job-loss worries at levels normally seen in recessions, a record-high share saying business conditions are worsening, falling income expectations, and rapidly rising inflation expectations. The concern is that weak sentiment spills over into weaker actual spending.
  • Microsoft Pulls Back on Data Centers From Chicago to Jakarta — Microsoft has halted talks for or delayed data center projects in Indonesia, the UK, Australia, Illinois, North Dakota and Wisconsin. It is unclear how much of the pullback reflects expectations of weaker demand for artificial intelligence and cloud services versus construction constraints such as shortages of power and building materials.

AI Summary. Republicans in the White House, Senate and House are drafting analyses on creating a new top income tax bracket for the wealthiest Americans, with a House proposal setting the rate at 40% for taxpayers earning $1m or more a year.

Nancy Cook, Saleha Mohsin, and Erik Wasson Bloomberg
Date Posted:

Both the White House and Republicans in the Senate and House are drafting an analysis of a new tax bracket for high-earning Americans; a House proposal would set the rate at 40% for income over $1mm annually, close to the pre-TCJA top rate of 39.6%.

Are Republicans considering a new top tax bracket for millionaires?

Core argument: A House Republican proposal would set a new top tax bracket at a 40% rate for taxpayers earning $1 million or more a year, according to people familiar with the proposal.

Republicans in the White House, Senate and House are drafting analyses on how best to craft a new tax bracket for the wealthiest Americans, work that signals the GOP under President Donald Trump is seriously considering ideas to raise taxes on the rich. The House proposal would set the new rate at 40% for taxpayers earning $1 million or more a year, according to people familiar with the proposal. Economic policy aides in the Senate and the Trump administration have been studying the idea as well, according to people briefed on the work. A White House official, speaking on the condition of anonymity to discuss private conversations, said Trump is open to the idea of a new top tax bracket. However, the person emphasized that the higher rate should kick in at a threshold far greater than $1 million.

Takeaways by Macro Roundup® AI

  1. A House Republican proposal would set a new top tax bracket at a 40% rate for taxpayers earning $1 million or more a year, according to people familiar with the proposal.
  2. Republicans in the White House, Senate and House are drafting analyses on how best to craft a new tax bracket for the wealthiest Americans.
  3. A White House official, speaking anonymously, said President Donald Trump is open to a new top tax bracket but emphasized that the higher rate should kick in at a threshold far greater than $1 million.

Related Articles:

  • Capitalists in the Twenty-First Century — Most income at the top of the US distribution is non-wage income, primarily profits from closely-held, mid-market firms in skill-intensive industries owned by working-age individuals. The authors find private business profit falls by three-quarters after an owner retires or dies prematurely, indicating most top earners are "working rich" deriving income from human capital.
  • Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications — Swedish data show that when a wealth-taxed entrepreneur emigrates, employment at their businesses falls 33%, value-added 34%, tax payments 50%, and investment 21%, but 60% of closed firms are absorbed by other domestic companies. The authors estimate aggregate effects on employment and investment are small.
  • Behavioral Responses to State Income Taxation of High Earners: Evidence from California — A California ballot measure raising top marginal income tax rates by up to 3 percentage points prompted an additional 0.8% of the affected tax base to leave the state, with an estimated income elasticity of 2.5–3.2 for high earners who stayed. The authors estimate these responses eroded 45.2% of windfall revenues within one year and 60.9% within two.

AI Summary. Intelligence test scores rose roughly 2–3 IQ points per decade, about one standard deviation between 1942 and 2008, before reversing. Analysis of Norwegian Armed Forces intelligence scores finds that neither the rise nor the reversal reflects changes in general mental ability, attributing them instead to shifts in test properties and education.

Morten Nordmo, Tore Nøttestad Norrøne and Ole Christian Lang-Ree Intelligence
Date Posted:
Is Database:
Database

Analysis of a General Mental Ability (GMA) test given to Norwegian soldiers since 1954 suggest that the upward trend in global IQ scores btw 1942-2008 and its subsequent reversal is a testing artifact, not a reflection of real changes in GMA.

Do rising and falling IQ scores reflect real changes in intelligence?

Core argument: Global intelligence test scores rose 2–3 IQ points per decade, an increase of roughly 1 standard deviation between 1942 and 2008, a pattern known as the Flynn Effect that has reversed since 2008.

Global intelligence test scores over time show a consistent rise of 2–3 IQ points per decade, resulting in an approximate increase of 1 standard deviation from 1942 to 2008. The increase in test scores is now known as the Flynn Effect. [This trend has shown a reversal since 2008]. Research has shown that the Flynn Effect isn’t and hasn’t been strongly identified with latent cognitive ability for quite some time, this study builds on that foundation by providing a more nuanced understanding of the observed increases in observed GMA scores. In addition, the results add to the growing body of research indicating that the Flynn reversal also does not reflect changes in general ability. Specifically, our findings are more in line with the conclusion that the reversal is influenced by shifts in test properties, and educational changes rather than broad changes in general mental ability. These results emphasize the need for careful interpretation of temporal intelligence trends and reinforce the importance of measurement invariance in cross-generational comparisons.

Takeaways by Macro Roundup® AI

  1. Global intelligence test scores rose 2–3 IQ points per decade, an increase of roughly 1 standard deviation between 1942 and 2008, a pattern known as the Flynn Effect that has reversed since 2008.
  2. The study of Norwegian Armed Forces intelligence scores builds on prior research finding that the Flynn Effect is not strongly identified with latent cognitive ability, offering a more nuanced account of rises in observed general mental ability scores.
  3. The authors conclude that the reversal in test scores is influenced by shifts in test properties and educational changes rather than broad changes in general mental ability, underscoring the importance of measurement invariance in cross-generational comparisons.

Related Articles:

Thursday, April 17, 2025

AI Summary. Standard interest-rate parity implies a 50 basis-point rise in U.S. long-term yields relative to European yields should appreciate the dollar about 5%, yet the dollar depreciated 3.6%, leaving an 8.6% gap. The authors argue investors have reduced their willingness to pay for the safety and liquidity of all dollar-denominated assets, not only U.S. Treasury securities.

Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig, Robert Richmond, and Chenzi Xu Working Paper
Date Posted:

The dollar fell 3.4% btw April 4th and the 14th despite a 50 bps rise in the yield spread btw the 10-year Treasury and the 10-year Bund. Relative to historical behavior, this implies a flight from private dollar assets, not merely Treasuries.

Why did the dollar depreciate as US yields rose?

Core argument: Under long-run uncovered interest rate parity, a 50 bps rise in U.S. long-term yields relative to European yields implies about 5% dollar appreciation, yet the dollar depreciated 3.6%, leaving an 8.6% gap.

With long-run uncovered interest rate parity as the benchmark, a 50 bps increase in U.S. long-term yields relative to European yields should immediately appreciate the dollar by about 5%. Yet, we observed 3.6% depreciation, leaving a surprising gap of 8.6%. Back of the envelope calculation suggests investors have permanently decreased their willingness to pay for the safety and liquidity not just of US Treasurys, but of all dollar-denominated assets. If investors had only revised their willingness to pay for the safety of Treasurys, then we would have only predicted a much smaller 83 bps depreciation of the dollar. Figure 3 plots the dollar exchange rate against the fitted value with the yield spread and with the convenience yield, measured by the 1 year basis. When we include the basis, the fitted value tracks the actual exchange rate dynamics quite well. The model without the basis completely misses the dollar depreciation between April 4 and 14. [The degree of] sensitivity of the dollar exchange rate to the widening of the Treasury basis suggests that investors are fleeing from the dollar, not just from Treasurys

Takeaways by Macro Roundup® AI

  1. Under long-run uncovered interest rate parity, a 50 bps rise in U.S. long-term yields relative to European yields implies about 5% dollar appreciation, yet the dollar depreciated 3.6%, leaving an 8.6% gap.
  2. A back-of-the-envelope calculation suggests investors have permanently decreased their willingness to pay for the safety and liquidity of all dollar-denominated assets, not just U.S. Treasurys, which alone would imply only 83 bps of depreciation.
  3. Adding the convenience yield, measured by the 1-year basis, lets the fitted exchange rate track actual dollar dynamics quite well, while the model without the basis misses the dollar depreciation between April 4 and 14.

Related Articles:

  • Dollar Downgrade — The author argues that rising 10- and 30-year US Treasury yields do not show up in long-term inflation expectations, judging by the spread between inflation-indexed and non-indexed Treasury bonds. The author attributes the increase instead to a shift in demand away from long-dated US debt, reinforcing higher long-term real interest rates.
  • Tariffs, the Dollar, and Equities: High-Frequency Evidence from the Liberation Day Announcement — Following a sweeping US tariff announcement, the dollar's effective exchange rate depreciated rather than appreciating as standard international macroeconomic models predict: all G10 currencies gained against the dollar while the most freely floating emerging market currencies gained less or fell. The authors read this as advanced economies rebalancing away from dollar assets.
  • The Great European Disentanglement From US Stocks Has Only Just Started — Federal Reserve data show European investors held about $9tn in US stocks, roughly 17% of the total value of the US market. After inflation, a dollar invested in the US at the start of 2000 was worth $3.28 by the end of 2024, versus $1.63 for the rest of the world.

AI Summary. The dollar has weakened to fresh lows against the euro, Japanese yen and Swiss franc, with the ICE U.S. Dollar Index down 8% this year, the worst start to a year in its four-decade history. Some on Wall Street worry China will push the yuan lower to offset trade-war effects.

Chelsey Dulaney and Alistair MacDonald Wall Street Journal
Date Posted:

Since the start of the year, the dollar is down 8% against a broad basket of currencies, 8.9% against the Euro, 9.2% against the Yen. Wall Street is concerned China may “push the yuan even lower, [which] could ripple across financial markets.”

How does a weakening dollar affect the global economy?

Core argument: The ICE U.S. Dollar Index has slipped 8% this year, the worst start to a year in the index's four-decade trading history, with the dollar hitting fresh lows against the euro, the Japanese yen and the Swiss franc.

The U.S. currency resumed its rapid weakening Wednesday, hitting fresh lows against the euro, the Japanese yen and the Swiss franc. The dollar decline has been historic, with the ICE U.S. Dollar Index, a measure of the greenback against a basket of currencies, slipping 8% this year, the worst start to a year in the index’s four-decade trading history. China has let its currency move close to its weakest level against the dollar in years. Some on Wall Street worry Beijing will push the yuan even lower to offset the effects of the trade war, a move that could ripple across financial markets.

Takeaways by Macro Roundup® AI

  1. The ICE U.S. Dollar Index has slipped 8% this year, the worst start to a year in the index's four-decade trading history, with the dollar hitting fresh lows against the euro, the Japanese yen and the Swiss franc.
  2. China has let the yuan move close to its weakest level against the dollar in years, and some on Wall Street worry Beijing will push the currency even lower to offset the effects of the trade war, a move that could ripple across financial markets.

Related Articles:

  • Dollar Upheaval: This Time is Different — Standard interest-rate parity implies a 50 basis-point rise in U.S. long-term yields relative to European yields should appreciate the dollar about 5%, yet the dollar depreciated 3.6%, leaving an 8.6% gap. The authors argue investors have reduced their willingness to pay for the safety and liquidity of all dollar-denominated assets, not only U.S. Treasury securities.
  • China Offers First Hint of Devaluation With Weak Renminbi Fix — China's central bank set the renminbi's daily fixing rate just below 7.2 to the dollar, its weakest level in 18 months, signaling it may permit depreciation to offset US tariffs. Many economists believe Beijing will avoid a large devaluation because it would risk capital outflows and domestic instability.
  • Tariffs, the Dollar, and Equities: High-Frequency Evidence from the Liberation Day Announcement — Following a sweeping US tariff announcement, the dollar's effective exchange rate depreciated rather than appreciating as standard international macroeconomic models predict: all G10 currencies gained against the dollar while the most freely floating emerging market currencies gained less or fell. The authors read this as advanced economies rebalancing away from dollar assets.

AI Summary. The estimated return to a college degree has held between 12–13% for three decades, reaching 12.5% recently, compared with long-term returns of about 8% for stocks and 4% for bonds. Median earnings for bachelor's degree holders were about $80,000 versus $47,000 for high school graduates, a premium near its all-time high.

Jaison Abel and Richard Deitz Federal Reserve Bank of New York
Date Posted:
Is Database:
Database

The median college graduate earns $80k annually relative to $47k for the median high school graduate, leaving the college wage premium close to its all-time high.

Does a college degree still deliver a high return on investment?

Core argument: The return to college was 12.5% in 2024 and has held between 12–13% for three decades after rising in the 1980s and early 1990s, compared with about 8% for the stock market and 4% for bonds.

After rising significantly in the 1980s and early 1990s, the return to college has held between 12 -13% for the past three decades and was 12.5% in 2024—easily exceeding the threshold for a sound investment. Indeed, by comparison, the stock market has provided a long-term return of about 8% and bonds have returned around 4%. In recent years, the median college graduate with just a bachelor’s degree earned about $80,000, compared to $47,000 for the median worker with only a high school diploma. This means a typical college graduate earned a premium of over $32,000 per year, or about 68%—near its all-time high. Real wages for both groups have generally been rising over the past decade, as tight labor markets benefited high school graduates and college graduates. Indeed, median wages for college graduates increased more, rising 7% compared to 5% for high school graduates. This increase was a noteworthy change for high school graduates, who saw their median wages stagnate from 1994 to 2014, though it represented a continuing trend for college graduates, whose wages have been trending upward for three decades.

Takeaways by Macro Roundup® AI

  1. The return to college was 12.5% in 2024 and has held between 12–13% for three decades after rising in the 1980s and early 1990s, compared with about 8% for the stock market and 4% for bonds.
  2. The median worker with just a bachelor's degree earned about $80,000 versus $47,000 for the median worker with only a high school diploma, a premium of over $32,000 a year, or about 68%, near its all-time high.
  3. Median wages rose 7% for college graduates and 5% for high school graduates over the past decade, a noteworthy change for high school graduates, whose median wages stagnated from 1994 to 2014.

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.
  • Talent Disrupted: Underemployment, College Graduates, and the Way Forward — A study classifying college graduates as underemployed when their occupation does not typically require a bachelor's degree finds that of every 100 graduates with a terminal bachelor's degree, 48 hold college-level jobs one year after graduation and 55 do at both five and 10 years. Graduates who start underemployed largely remain so.
  • When College Might Not Be Worth It — A college degree does not appear to have paid off for at least a quarter of graduates in recent decades, even at average costs. Returns can be lower when a college charges above-average tuition, financial aid is limited, students live on campus, degrees take five or six years, or earnings fall below the median.

AI Summary. A college degree does not appear to have paid off for at least a quarter of graduates in recent decades, even at average costs. Returns can be lower when a college charges above-average tuition, financial aid is limited, students live on campus, degrees take five or six years, or earnings fall below the median.

Jaison Abel and Richard Deitz Federal Reserve Bank of New York
Date Posted:
Is Database:
Database

Students who take longer to graduate, attend expensive schools, or choose “soft” majors experience a lower return on investment in college education. In recent decades, a college degree hasn’t paid off for 25% of students.

Does a college degree pay off for all graduates?

Core argument: Even at average costs, a college degree does not appear to have paid off for at least a quarter of college graduates in recent decades.

There are many circumstances under which college graduates do not earn a high return. Some colleges are much more expensive than average, and financial aid is not guaranteed no matter which college a student attends. In addition, the potentially high cost of living on campus was not factored into our estimates. Some students also may take five or six years to finish their degrees, which can significantly increase costs. Further, our calculations were based on median wages over a working life, but half of college graduates earn less than the median. Indeed, even when paying average costs, we find that a college degree does not appear to have paid off for at least a quarter of college graduates in recent decades.

Takeaways by Macro Roundup® AI

  1. Even at average costs, a college degree does not appear to have paid off for at least a quarter of college graduates in recent decades.
  2. Estimates of college's return rest on median wages over a working life, yet half of college graduates earn less than the median, and financial aid is not guaranteed at any college.
  3. The estimates exclude the potentially high cost of living on campus, and students who take five or six years to finish a degree can face significantly higher costs.

Related Articles:

  • Standardized Test Scores and Academic Performance at Ivy-Plus Colleges — An analysis of admissions and transcript records at Ivy-Plus colleges finds standardized test scores predict first-year college grades with a normalized slope 4x greater than high school grade point average, controlling for race, gender, and socioeconomic status. The authors find no evidence test scores underpredict college performance for students from less advantaged backgrounds.
  • Returns to Specific Graduate Degrees: Estimates Using Texas Administrative Records — Using Texas administrative records, researchers estimate that program rank matters for business and law degrees: a 20-place ranking improvement is associated with returns higher by 0.026 for an MBA (average return 0.125) and 0.07 for a law degree (average return 0.453). Returns to nursing, social work, and pharmacy degrees show no such ranking dependence.
  • And Is College Still Worth It? — The estimated return to a college degree has held between 12–13% for three decades, reaching 12.5% recently, compared with long-term returns of about 8% for stocks and 4% for bonds. Median earnings for bachelor's degree holders were about $80,000 versus $47,000 for high school graduates, a premium near its all-time high.

AI Summary. The European Union is preparing a proposal to restrict some exports to the US as a deterrent, to be used only if trade negotiations fail, after the US imposed new tariffs on roughly €380bn ($432bn) of EU goods. Such restrictions typically target goods that are critical and difficult to replace.

Alberto Nardelli Bloomberg
Date Posted:

The EU is considering export restrictions if the US and EU are unable to reach a trade deal. Typically, these types of restrictions target goods that are critical to the country and difficult to replace. In 2023, the EU ran a €51.8 net surplus with the US.

Is Europe preparing export restrictions as leverage against US tariffs?

Core argument: The European Union is preparing a proposal to restrict some exports to the US as possible retaliation in the trade war, after the US imposed new tariffs on around €380 billion ($432 billion) of EU goods, according to people familiar with the plan.

The European Union is working on a proposal to introduce restrictions on some exports to the US as a possible retaliatory tactic in the expansive trade war President Donald Trump initiated last month. The restrictions would be used as a deterrent and only if negotiations with the US — which has put new tariffs on around €380 billion ($432 billion) of EU goods — fail to produce a satisfactory outcome, according to people familiar with the plan. Typically these types of restrictions target goods critical to the country and that would be difficult to replace.

Takeaways by Macro Roundup® AI

  1. The European Union is preparing a proposal to restrict some exports to the US as possible retaliation in the trade war, after the US imposed new tariffs on around €380 billion ($432 billion) of EU goods, according to people familiar with the plan.
  2. The EU would deploy the export restrictions as a deterrent and only if negotiations with the US fail to produce a satisfactory outcome, according to people familiar with the plan.
  3. Restrictions of this type typically target goods that are critical to the country concerned and difficult to replace.

Related Articles: