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


Tuesday, August 26, 2025

AI Summary. Using payroll records covering millions of US workers, the authors find employment for workers aged 22–25 in occupations most exposed to artificial intelligence, such as software developers and customer service representatives, declined 6%, while employment for older workers in those occupations rose 6–9%. Employment in less-exposed occupations grew comparably across age groups.

Erik Brynjolfsson, Bharat Chandar and Ruyu Chen Stanford University
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In the 20% of occupations most exposed to AI, employment of 22- to 25-year-olds declined 6% since late 2022, driving this cohort’s “tepid overall job growth,” while employment in each of the >25 age groups rose between 6% and 8%.

Is AI reducing employment for young workers in exposed occupations?

Core argument: Workers aged 22–25 in the most AI-exposed occupations experienced a 6% decline in employment from late 2022 to July 2025, compared with a 6–9% increase for older workers, according to ADP payroll records through July 2025.

This paper [leverages] a large-scale, high-frequency administrative dataset from ADP, the largest payroll software provider in the United States [using] monthly, individual-level payroll records through July 2025, [with] millions of workers across tens of thousands of firms. We uncover substantial declines in employment for early-career workers (ages 22-25) in occupations most exposed to AI, such as software developers and customer service representatives. Employment trends for experienced workers in the same occupations, and workers of all ages in less-exposed occupations such as nursing aides, have remained stable or continued to grow, and in jobs less exposed to AI young [and old] workers have experienced comparable employment growth. In contrast, workers aged 22 to 25 have experienced a 6% decline in employment from late 2022 to July 2025 in the most AI-exposed occupations, compared to a 6-9% increase for older workers. These results suggest that declining employment in AI-exposed jobs is driving tepid overall employment growth for 22 to 25 year-olds as employment for older workers continues to grow.

Takeaways by Macro Roundup® AI

  1. Workers aged 22–25 in the most AI-exposed occupations experienced a 6% decline in employment from late 2022 to July 2025, compared with a 6–9% increase for older workers, according to ADP payroll records through July 2025.
  2. Employment for experienced workers in AI-exposed occupations and for workers of all ages in less-exposed occupations such as nursing aides remained stable or continued to grow, with young and older workers seeing comparable growth in less-exposed jobs.
  3. The paper suggests that declining employment in AI-exposed jobs, such as software developers and customer service representatives, is driving tepid overall employment growth for 22 to 25 year-olds while employment for older workers continues to grow.

Related Articles:

  • AI and Jobs: The Final Word (Until the Next One) — Unemployment has risen by 0.30 percentage points for the fifth of workers most exposed to artificial intelligence, compared with 0.94 percentage points for the least exposed fifth, leaving no visible AI effect on jobs. The share of workers leaving the labor force within a year is lowest among the most AI-exposed workers and roughly flat.
  • 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.
  • Expertise — The authors' model of automation predicts that occupations with rising expertise requirements see higher wages but falling employment, while those with declining requirements see lower wages alongside rising employment. Analyzing employment and earnings data by occupation across four decades, they find changes in occupational expertise strongly predict changes in occupational wages.

AI Summary. The decline in gross migration between U.S. states over the past 50 years is modest and has been essentially flat since the early 2000s, with the net migration rate showing no trend and little evidence that demographic change explains the decline. Most moves offset each other, with only about 10–12 out of 100 producing a net population shift between states.

Andrea Foschi, Christopher House, Christian Proebsting, and Linda Tesar Federal Reserve Bank of Kansas City
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U.S. gross migration rates have fallen modestly over the past 50 years, but net migration has hardly budged. “On average, only 10–12 out of 100 moves reflect a net flow from one location to another.”

Has migration between U.S. states declined significantly?

Core argument: Only 10–12 of every 100 U.S. inter-state moves reflect a net flow from one location to another, with the majority of gross migration consisting of flows that offset each other.

The decline in gross inter-state migration over the last 50 years is relatively modest and has been essentially stable since the early 2000’s. The net migration rate, which is one of the main equilibrating mechanisms between locations, exhibits no trend. There is little evidence that demographic changes explain the decline in aggregate gross migration. Figure 2 plots gross migration and its decomposition into the contributions of absolute net migration and offsetting migration– since 1975 using the IRS data. We see again the slight decline in the gross migration rate, matched by a similar trend in the Offsetting Migration Rate. We also see that the majority of gross migration is given by flows that offset each other, and only a small fraction of flows actually induce a change in a given state’s population. On average, only 10-12 out of 100 moves reflect a net flow from one location to another. Net flows are a small fraction of overall labor migration and have remained fairly constant.

Takeaways by Macro Roundup® AI

  1. Only 10–12 of every 100 U.S. inter-state moves reflect a net flow from one location to another, with the majority of gross migration consisting of flows that offset each other.
  2. The decline in gross inter-state migration over the past 50 years is relatively modest and has been essentially stable since the early 2000s, with the net migration rate showing no trend.
  3. IRS data since 1975 show the slight decline in the gross migration rate matched by a similar trend in the offsetting migration rate, and there is little evidence that demographic changes explain the decline.

Related Articles:

  • Where is Standard of Living the Highest? Local Prices and the Geography of Consumption — The authors estimate that geographical differences in cost of living are especially large for low-income US households, and that expensive cities offer college graduates a standard of living similar to affordable cities while offering less-educated households a lower one. A high school dropout household moving from the most affordable to the most expensive commuting zone would see consumption fall 18.5%.
  • Housing Constraints and Spatial Misallocation — The authors estimate that housing supply constraints in high-productivity cities such as New York and San Francisco misallocated labor and lowered aggregate US growth by 36% over 1964–2009. Relaxing supply in those cities to the median US city's level is estimated to have raised output 3.7%, or about $3,685 in additional average annual earnings.
  • Why Is Geographic Mobility Declining? — As women's earnings and full-time employment rates converge with men's, geographic mobility would be expected to decline, since couples with similar earnings are less likely to relocate than those with unequal earnings. The convergence may also raise child care needs, encouraging families to locate near relatives who can help.

AI Summary. Government spending has marginally declined from the prior two years, so fiscal policy is no longer a tailwind for growth, though the deficit still adds about $2tn a year to private sector wealth. Tariff pass-through to consumer prices and resumed collections on defaulted student loans tighten spending among high-propensity consumers.

Joseph Wang Fed Guy Blog
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Joe Wang believes a small reduction in federal spending, along with tariffs and the resumption of student loan payments, suggest that fiscal policy will not be as supportive of growth as it was in 2023–2024.

Has government spending stopped being a tailwind for economic growth?

Core argument: Government spending has declined marginally this year from the prior two years, so fiscal spending is no longer a tailwind for economic growth, even as overall fiscal policy remains loose.

This year government spending has so far marginally declined from the prior two years, so fiscal spending is no longer a tailwind for economic growth. On a stock level, the fiscal deficit is still increasing the level of private sector wealth at $2t a year as it continues to print Treasuries. That additional wealth could be rebalanced into other financial assets, or potentially spent on goods and services. While overall fiscal policy remains loose, the Administration has enacted some fiscal tightening that is impactful on cohorts with a high propensity to consume. Tariffs will have some degree of pass through to consumer prices and in effect act as a modest consumption tax on goods. This has a larger impact on low income consumers where goods are a relatively large share of overall consumption. The resumption of collections on defaulted student loans for the first time since 2020 will reduce the disposable income and credit scores of several million borrowers. Student loans repayments were suspended in 2020, were resumed in Fall of 2023 with a one year on-ramp, and collections on defaults were restarted this past May.

Takeaways by Macro Roundup® AI

  1. Government spending has declined marginally this year from the prior two years, so fiscal spending is no longer a tailwind for economic growth, even as overall fiscal policy remains loose.
  2. The fiscal deficit continues to add about $2tn a year to private sector wealth through Treasury issuance, wealth that could be rebalanced into other financial assets or spent on goods and services.
  3. Tariffs act in effect as a modest consumption tax on goods, weighing more on low income consumers, while the May restart of collections on defaulted student loans, the first since 2020, reduces disposable income and credit scores for several million borrowers.

Related Articles:

  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • Significant Headwinds to Consumer Spending — With the pause on reporting delinquent federal student loans ended, up to 10% of US households may face a steep drop in their credit scores, leaving them unable to borrow for cars, homes, or furniture. Together with tariffs and high uncertainty, this is a significant headwind to consumer spending.
  • How America’s AI Boom Is Squeezing The Rest Of The Economy — About a sixth of America's 2% real GDP growth over the past year came from investment in computer and communications equipment and data centres, and one estimate puts the artificial intelligence boom's total contribution to growth at 40%. Average electricity bills rose 7%, attributed in part to data-centre demand, while housebuilding and non-AI business investment slumped and real consumption flatlined.

AI Summary. Replacing a Federal Reserve governor could give the president enough appointees on the seven-member board to outvote the chair and push interest rates in his preferred direction. Board members vote on rates alongside five independently appointed reserve-bank presidents, so more aligned governors could build momentum toward the rate cuts he has pressed for.

Matt Grossman and Greg Ip Wall Street Journal
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Greg Ip argues the potential firing of Lisa Cook is a credible threat to Fed independence, noting “No president has ever tried to fire a Fed board member.”

Can a president gain enough central bank appointees to steer interest rates?

Core argument: Replacing Fed governor Cook could give Trump enough voices on the seven-member board of governors to potentially outvote Powell and move interest rates in his preferred direction.

By replacing Cook, [Trump] could add enough voices to the seven-member board of governors to potentially outvote Powell and move interest rates in his preferred direction. The resignation this month of Fed governor Adriana Kugler, appointed by Biden, already gave Trump a vacancy on the board, to which he has nominated a close adviser, Stephen Miran. Miran now awaits Senate confirmation. The two governors whom Trump appointed during his first term, Michelle Bowman and Christopher Waller, voted against the committee’s decision last month to hold rates steady, arguing for a cut instead. Board members vote on interest rates alongside five independently appointed reserve-bank presidents. But more Trump-aligned governors on the board could mean more momentum toward the rate cuts that Trump has pressed for.

Takeaways by Macro Roundup® AI

  1. Replacing Fed governor Cook could give Trump enough voices on the seven-member board of governors to potentially outvote Powell and move interest rates in his preferred direction.
  2. The resignation of Biden-appointed Fed governor Adriana Kugler gave Trump a board vacancy, to which he nominated close adviser Stephen Miran, who awaits Senate confirmation.
  3. Michelle Bowman and Christopher Waller, the two governors Trump appointed in his first term, voted against the committee's decision to hold rates steady, arguing for a cut instead.

Related Articles:

  • Fed Rate Cuts Won’t Make Long Yields Fall — Markets have moved to price 125 basis points of Federal Reserve rate cuts, double the amount priced earlier, yet the 30-year Treasury yield has risen from 4.78% to 4.92%, showing policy rate cuts need not lower long-term yields. The author argues doubts about Federal Reserve independence could raise long yields further through higher risk premia.
  • Why Is The Yield Curve Steepening? Because Of Coming Fed Cuts And Fiscal Challenges — The US yield curve is steepening across both the 2-to-10-year and 10-to-30-year segments. The article attributes this to Federal Reserve rate cuts, the risk that markets read those cuts as politically motivated and raise inflation expectations and long-term rates, and growing Treasury debt issuance pushing long rates up.
  • 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. US steelmakers have gained market share from imports but have not prevented prices from slipping amid soft demand from major buyers such as the auto and construction industries. About 21m tons of additional US steel production capacity has been announced, started or completed over four years, roughly a quarter of last year's total US output.

Bob Tita and Andrew Mollica The Wall Street Journal
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American steel manufacturers have gained 7pp of market share since 2015 and are expanding domestic capacity by ~25% of 2024’s domestic production, though American steel prices are the highest globally.

Is new steel capacity growing faster than demand?

Core argument: Twenty-one million tons of additional U.S. steel capacity has been announced, put under construction or completed over the past four years, roughly a quarter of total U.S. steel production last year, per a Wall Street Journal analysis of Argus Media market data.

Domestic steelmakers have embraced a protectionist fervor and gained market share versus imports. But they haven’t been able to keep prices from slipping because of soft demand from major steel consumers such as the auto and construction industries. Twenty-one million tons of additional steel production capacity has been announced, placed under construction or completed in the past four years, according to a Wall Street Journal analysis of market data from Argus Media. That figure is roughly a quarter of total U.S. production of the metal last year.

Takeaways by Macro Roundup® AI

  1. Twenty-one million tons of additional U.S. steel capacity has been announced, put under construction or completed over the past four years, roughly a quarter of total U.S. steel production last year, per a Wall Street Journal analysis of Argus Media market data.
  2. U.S. steelmakers have gained market share against imports amid protectionist fervor, yet steel prices have slipped because of soft demand from major consumers such as the auto and construction industries.

Related Articles:

  • Steel Productivity has Plummeted Since Trump’s 2018 Tariffs — Output per hour in the U.S. steel industry has fallen 32% since 2017, following the imposition of 25% tariffs on steel imports, while output per hour for the economy as a whole rose 15%. U.S. steel-using firms, which employ roughly 45x as many Americans as steel producers, pay about 75% more for steel than global competitors.
  • “No Inventions; No Innovations,” A History of US Steel — US Steel lagged in adopting steelmaking technology, only moving into minimills through an acquisition and a new Alabama plant, with minimills now making about 25% of its domestic output. Rival minimill producer Nucor passed US Steel in output and is now the largest US steel producer.
  • Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States — The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.

AI Summary. Europe's share of global stock market valuations has fallen from 18% to 10% for the EU and from 8.3% to 2.6% for the UK, while America's has held at 48%. Tax revenue equals 38–44% of output in Germany, Italy and France versus 25% in the US, and industrial electricity costs 3–4x US levels.

David Luhnow and Tom Fairless Wall Street Journal
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Deutsche Bank notes that the German economy has grown 1% since 2017 relative to US growth of 19%. Since 2000, the US share of global market capitalization has held steady at 48% while the EU/UK shares fell from 18% to 10%, and 8.3% to 2.6%, respectively.

Why is Europe's share of global stock market value shrinking?

Core argument: The EU's share of global stock market valuations has fallen from 18% to 10% since 2000 and the UK's from 8.3% to 2.6%, while America's has held steady at 48%, according to Deutsche Bank.

Ten years ago, four European companies ranked in the global top 10 by revenues. Today, the continent’s biggest company by market value, German software firm SAP, ranks 28th. America’s share of global stock market valuations has held steady at 48% since 2000, but the EU’s has fallen from 18% to 10%, and the UK’s from 8.3% to 2.6%, according to Deutsche Bank. Tax revenue as a share of economic output is already around 38% in Germany, 43% in Italy and 44% in France, compared with 25% in the U.S., according to OECD data. In Germany, industrial electricity costs three times as much as in the U.S.; in the U.K., four times as much. Britons now consume less electricity per person than the Chinese, and Germany’s overall electricity consumption is lower than it was before the Berlin Wall fell. Yet Germany has banned nuclear energy, and the U.K. has scrapped new offshore oil and gas exploration.

Takeaways by Macro Roundup® AI

  1. The EU's share of global stock market valuations has fallen from 18% to 10% since 2000 and the UK's from 8.3% to 2.6%, while America's has held steady at 48%, according to Deutsche Bank.
  2. Europe's largest company by market value, German software firm SAP, ranks 28th globally, compared with four European companies in the global top 10 by revenues a decade ago.
  3. Industrial electricity costs three times as much in Germany and four times as much in the UK as in the U.S., while Germany has banned nuclear energy and the UK has scrapped new offshore oil and gas exploration.

Related Articles:

  • Why the U.S. Economy Is Trouncing Europe’s — Only about 12% of Americans score at the highest levels on international academic tests versus 34% at the lowest, yet the U.S. has created nearly 250 companies worth over $10bn ($30tn in value) against Europe's 14, and median U.S. disposable household income is 25% above Germany's. The author argues expanding high-skilled immigration is the fastest way to accelerate growth.
  • A Visualization of Europe’s Non-Bubbly Economy — The Draghi report notes that no European Union company with a market capitalization above €100bn was founded from scratch in the past fifty years, while all six US companies valued above €1tn were. The 13 EU companies founded in that period and worth at least $10bn total about $400bn, versus nearly $30tn for their US counterparts.
  • 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.

Wednesday, August 27, 2025

AI Summary. Using administrative tax data, the authors estimate the 400 wealthiest Americans paid a total effective tax rate of 23.8% of economic income, down from about 30% earlier in the decade and below the average rate for the full US population. The decline followed a drop in corporate taxes paid.

Akcan Balkir, Emmanuel Saez, Danny Yagan and Gabriel Zucman National Bureau of Economic Research
Date Posted:

Until the TCJA, the top 400 US individuals by wealth and the full US population both had effective tax rates of ~30%. The TCJA reduced the Top 400 individuals’ total ETRs to 23.8% in 2018 – 2020, well below those of the full population.

How much do the wealthiest Americans pay in taxes?

Core argument: The top 400 US individuals paid a total effective tax rate of 23.8% of economic income in 2018–2020, down from about 30% earlier in the decade and substantially below the average rate for the full US population.

Figure 2 shows the evolution of top 400 taxes over the 2010 - 2020 period. Panel (a) plots the raw nominal amounts of taxes paid without any adjustment whatsoever. We can see a decline of one-third in the nominal amount of corporate tax paid by the top 400 between 2014-17 and 2018-20, in line with the decline in the federal corporate tax rate from 35% to 21%. Corporate tax payments also fell between 2010-13 and 2014-17, [but] due to a decline in corporate profits accruing to the top 400. The patterns are similar when dividing taxes paid by our benchmark measure of economic income (panel b). Our results come from the numerator: absolute amounts of taxes paid fell. Panel (c) reports our main findings: the evolution of the total effective tax rate of the top 400 as a fraction of economic income. While the top 400 and the top 100 used to have a similar effective tax rate as the US population on average (around 30%), this is no longer the case after the Tax Cuts and Jobs Act. Top 400 individuals have a total effective tax rate of 23.8% in 2018 - 2020, down from about 30% earlier in the decade. This is substantially lower than the average tax rate for the full US population.

Takeaways by Macro Roundup® AI

  1. The top 400 US individuals paid a total effective tax rate of 23.8% of economic income in 2018–2020, down from about 30% earlier in the decade and substantially below the average rate for the full US population.
  2. Nominal corporate tax paid by the top 400 fell by one-third between 2014–17 and 2018–20, in line with the federal corporate tax rate cut from 35% to 21%.
  3. The top 400 and top 100 once had effective tax rates similar to the US population average of around 30%, a parity that no longer holds after the Tax Cuts and Jobs Act, with the change coming from falling absolute amounts of taxes paid.

Related Articles:

  • Comment on “How Much Tax Do Billionaires Pay?” — After adjusting existing estimates for families filing on multiple tax returns, double-counted capital income, missing taxes, and standard income definitions, the author finds the top 400 effective tax rate exceeds the overall rate by 13 percentage points, though it remains below the rate paid by the top 0.01% ranked by income.
  • Reply: Measuring Income Inequality: A Primer on the Debate — The authors defend their estimates of top income shares against a critique, arguing that the critique misrepresents how differing methods explain gaps in top 1% income shares and omits relevant context. They argue their estimates are consistent with other high-quality inequality studies and that audit studies find higher income misreporting outside the top 1%.
  • Is America Today Really No More Unequal Economic Class-Wise than It Was in 1960? — The wealthiest person on the Forbes 400 list held about 85,000x median family income in 1982 versus roughly 2,500,000x in 2023, a roughly 30x increase in that ratio. The author argues this is hard to reconcile with research finding little change in after-tax top income shares since 1980, and presumes those figures contain errors.

AI Summary. After adjusting existing estimates for families filing on multiple tax returns, double-counted capital income, missing taxes, and standard income definitions, the author finds the top 400 effective tax rate exceeds the overall rate by 13 percentage points, though it remains below the rate paid by the top 0.01% ranked by income.

David Splinter DavidSplinter.com
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After adjustments detailed below, Splinter finds that the Forbes 400’s effective tax rate is above that of the full population by 13pp, contrary to BSYZ.

How much tax do the wealthiest families actually pay?

Core argument: Adjusting the BSYZ estimates for Forbes 400 families spanning multiple tax returns, double-counted capital income, missing taxes, and standard income definitions raises the top 400 effective tax rate to 13 percentage points above the overall rate.

Starting with the BSYZ estimates, I adjust for Forbes 400 families being on multiple tax returns, remove double-counted capital income, add missing taxes, and apply standard income definitions. The resulting top 400 effective tax rate is above the overall rate by 13 percentage points. But even after these adjustments, the corrected top 400 effective tax rate is below the tax rate of the top 0.01% (about 32K individuals) when ranked by income. This dip in top rates at the very top of the wealth distribution is expected due to the reasons noted in BSYZ—retained earnings and accelerated depreciation of business expenses—but also because the top 400 are ranked by wealth in these estimates even though taxes are overwhelmingly based on income. Moving from ranking by income to wealth breaks the link with the tax base. Moreover, because BSYZ use one-year wealth rankings, they capture rapid wealth increases that push new members into the top 400 and push down annual tax rates. A longer-run picture would capture more taxes from these individuals as they realize capital gains or receive dividends related to those wealth increases, as well as end-of-life charitable bequests that represent a significant share of their wealth

Takeaways by Macro Roundup® AI

  1. Adjusting the BSYZ estimates for Forbes 400 families spanning multiple tax returns, double-counted capital income, missing taxes, and standard income definitions raises the top 400 effective tax rate to 13 percentage points above the overall rate.
  2. Even after these adjustments, the top 400 ranked by wealth show a lower effective tax rate than the top 0.01% ranked by income (about 32K individuals), a dip attributed to retained earnings, accelerated depreciation, and ranking by wealth rather than income.
  3. BSYZ's one-year wealth rankings capture rapid wealth increases that push new members into the top 400 and push down annual tax rates, while a longer-run picture would capture later realized capital gains, dividends, and end-of-life charitable bequests.

Related Articles:

AI Summary. U.S. construction labor productivity in 2023 was essentially unchanged from 1948, with real output per worker in 2020 more than 30% below its 1970 level, even as aggregate U.S. labor productivity tripled between 1950 and 2020. Construction accounted for about 4.5% of U.S. GDP in 2024.

Chen Yeh Federal Reserve Bank Of Richmond
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“Labor productivity in U.S. construction in 2023 was essentially the same as it was in 1948.” Btw 1970 and 2020, labor productivity in the American construction sector fell more than 30%.

Has U.S. construction productivity declined while overall productivity tripled?

Core argument: Real output per worker in U.S. construction was more than 30% lower in 2020 than in 1970, leaving 2023 labor productivity essentially unchanged from its 1948 level.

Labor productivity in U.S. construction in 2023 was essentially the same as it was in 1948. More importantly labor productivity in U.S. construction has actually been falling since the 1970s. Real output per worker in 2020 was more than 30% lower than in 1970, following one of the most persistent productivity declines in any major industry. This decline has significant implications not only for housing affordability but for overall economic growth. Construction represented about 4.5% of U.S. GDP in 2024. While this sector is less than half of manufacturing in terms of value added, the importance of a decline in construction productivity for its aggregate counterpart cannot be overstated. The magnitude of this decline becomes particularly striking when compared to overall economic performance. During the 1950s and 1960s, construction productivity actually grew at rates that matched or exceeded the broader economy. However, around 1970, construction productivity began a sustained downward trajectory that has continued for five decades. While aggregate U.S. labor productivity tripled between 1950 and 2020, its measure for construction remained essentially the same.

Takeaways by Macro Roundup® AI

  1. Real output per worker in U.S. construction was more than 30% lower in 2020 than in 1970, leaving 2023 labor productivity essentially unchanged from its 1948 level.
  2. Aggregate U.S. labor productivity tripled between 1950 and 2020 while construction productivity remained essentially flat, after construction matched or exceeded the broader economy's growth rates during the 1950s and 1960s.
  3. Construction accounted for about 4.5% of U.S. GDP in 2024, less than half of manufacturing in value added, with the sector's productivity decline carrying implications for housing affordability and overall economic growth.

Related Articles:

  • The Strange and Awful Path of Productivity in the U.S. Construction Sector — U.S. construction sector labor productivity and total factor productivity grew faster than the whole economy in the 1950s and 1960s, then fell, ending 2020 below their 1950 levels while economywide labor productivity and total factor productivity were 290% and 230% higher. Construction labor productivity fell about 1% a year from 1970 to 2020.
  • Building Costs and House Prices — Analysis of nearly 75 years of RSMeans construction cost data across many metro areas finds that building costs, while a large share of new home costs, are a weak predictor of variation in house prices, especially in the highest-cost metros. The authors attribute this decoupling partly to restrictions that prevent housing supply expansion in high-demand areas.
  • Why Has Construction Productivity Stagnated? The Role of Land-Use Regulation — Homes built per construction worker boomed after World War II and fell after 1970, a decline the authors link to local land-use regulation that limits project size and keeps construction firms small and less productive. They estimate US residential builders would be roughly 60% more productive if their size distribution matched manufacturing.

AI Summary. A reported 2.2m drop in the US foreign-born population in the household survey implies implausible labor-market outcomes: either payroll employment would need downward revision by millions, or the true unemployment rate would be at a 72-year low of 2.6% with a dangerously overheating economy.

Jed Kolko Peterson Institute For International Economics
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If the CPS-implied drop in the US immigrant population of 2.2mm were accurate, Jed Kolko argues, “overall U.S. unemployment would be at a 72-year low of 2.6% and the economy would be dangerously overheating.”

Is the reported drop in the foreign-born population credible?

Core argument: The Current Population Survey's reported 2.2 million decline in the U.S. foreign-born population since January would, if accurate, require nonfarm payroll employment to be revised downward by millions.

The reported decline in the foreign-born population in the CPS—if true—would lead to absurd implications about the labor market. Had the foreign-born population really fallen by 2.2 million people since January, then nonfarm payroll employment would need to be revised downward by millions—or the true unemployment rate would now be at a 72-year low of 2.6% and the economy would be dangerously overheating. The numbers just don’t add up.

Takeaways by Macro Roundup® AI

  1. The Current Population Survey's reported 2.2 million decline in the U.S. foreign-born population since January would, if accurate, require nonfarm payroll employment to be revised downward by millions.
  2. Taking the CPS foreign-born decline at face value would imply a true unemployment rate of 2.6%, a 72-year low, with the economy dangerously overheating.
  3. The reported multi-million decline in the U.S. foreign-born population does not add up against labor market data, given its implications for payrolls and unemployment.

Related Articles:

  • U.S. Unauthorized Immigrant Population Reached a Record 14 Million in 2023 — Pew Research Center estimates the U.S. unauthorized immigrant population reached an all-time high of 14m in 2023, or 4.1% of the total population, after a record two-year increase of 3.5m. The overall immigrant population peaked above 53m before declining by more than 1m in the first half of 2025.
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AI Summary. China's cycle of relentless competition and price cutting stems from its long-standing growth model, with the latest phase driven by an engineered shift of investment from property into manufacturing that was not tied to expected demand growth. Administrative fixes and exports shift excess capacity between sectors rather than resolving it.

Michael Pettis China Financial Markets
Date Posted:

China will struggle to address “involution,” the disruptive process of relentless competition and price cutting, as excess capacity derives from China’s “inability to align increases in domestic production with increases in domestic demand.”

What drives China's relentless price cutting, and do administrative fixes resolve it?

Core argument: China's involution — relentless competition and price cutting among businesses — is rooted in its decades-old growth model, with its most recent manifestation emerging after the property bubble ended in 2021–22 and Beijing engineered a shift in investment flows from property to manufacturing.

The roots of involution [a disruptive process of relentless competition and price cutting among Chinese businesses] lie in China’s decades-old growth model, but its most recent manifestation emerged in the few years since the end of China’s property bubble in 2021-22. Beijing chose to engineer a much larger shift in investment flows from property to manufacturing. It is important to note that the acceleration in manufacturing investment was not planned around any expected acceleration in Chinese or global demand. It was determined mainly by the need to keep investment growth from dropping. Beijing has chosen to patch up the system with administrative measures, shifting excesses from one sector to another, and relying on exports to cushion the imbalance. But this is a stopgap solution that “works” only by shifting excess capacity across different sectors in the economy.

Takeaways by Macro Roundup® AI

  1. China's involution — relentless competition and price cutting among businesses — is rooted in its decades-old growth model, with its most recent manifestation emerging after the property bubble ended in 2021–22 and Beijing engineered a shift in investment flows from property to manufacturing.
  2. The acceleration in Chinese manufacturing investment was not planned around any expected acceleration in Chinese or global demand, but determined mainly by the need to keep investment growth from dropping.
  3. Beijing has patched up the system with administrative measures and reliance on exports to cushion the imbalance, a stopgap that works only by shifting excess capacity from one sector of the economy to another.

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AI Summary. China is preparing three new fabrication plants dedicated to producing Huawei's artificial intelligence processors, and people familiar with the effort say their combined capacity, once fully ramped up, could exceed current output from comparable lines at SMIC, China's leading chipmaker. Huawei denies having plans to launch its own fabrication plants.

Zijing Wu Financial Times
Date Posted:

China is responding to American chip export restrictions by undertaking a massive expansion of domestic chip manufacturing, attempting to triple the country’s current output by the end of 2026.

Is China building new fabrication plants to expand AI chip output?

Core argument: Three fabrication plants dedicated to Huawei's AI processors are due to begin production, one as soon as the end of this year and two next year, with combined capacity once fully ramped up potentially exceeding SMIC's current output of similar lines, according to people with knowledge of the plans.

One fabrication plant dedicated to producing Huawei’s AI processors is scheduled to start production as soon as the end of this year, while two more are due to launch next year, said two people with knowledge of the plans. While the new plants are designed to specifically support Huawei, it is not clear who exactly owns them. Huawei denied having plans to launch its own fabs and did not provide further details. Huawei’s latest products are seen as among those that would satisfy DeepSeek’s requirements. While DeepSeek has done early work on Chinese chips in small samples, to prove that it is technically viable, the group’s current model training is done on the Nvidia chip. Combined capacity from these three new plants, once fully ramped up, could exceed the current total output of similar lines at Semiconductor Manufacturing International Corporation (SMIC), China’s leading fab, according to those people with knowledge of the effort.

Takeaways by Macro Roundup® AI

  1. Three fabrication plants dedicated to Huawei's AI processors are due to begin production, one as soon as the end of this year and two next year, with combined capacity once fully ramped up potentially exceeding SMIC's current output of similar lines, according to people with knowledge of the plans.
  2. Ownership of the three plants built to support Huawei is unclear, and Huawei denied having plans to launch its own fabs without providing further details.
  3. DeepSeek trains its current model on Nvidia chips, having done early work on Chinese chips in small samples to prove technical viability, while Huawei's latest products are seen as among those that would satisfy DeepSeek's requirements.

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