Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “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
  • “…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 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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, August 29, 2025

AI Summary. By allowing senior workers to complete tasks independently, artificial intelligence may reduce entry-level opportunities and impede younger workers' acquisition of tacit knowledge, the practical expertise that resists codification. The authors estimate this could lower the long-run annual growth rate of U.S. per capita output by 0.05 to 0.35 percentage points, depending on scale.

Enrique Ide arXiv
Date Posted:

“By enabling senior workers to accomplish more tasks independently, AI may inadvertently reduce entry-level opportunities, raising concerns about how future generations will acquire essential expertise” and potentially lowering growth in per capita GDP.

Does automating entry-level work slow long-run growth by blocking knowledge transfer?

Core argument: Back-of-the-envelope calculations suggest AI-driven automation of entry-level work could lower the long-run annual growth rate of U.S. per capita output by 0.05 to 0.35 percentage points, depending on the scale of automation.

By enabling senior workers to accomplish more tasks independently, AI may inadvertently reduce entry-level opportunities, raising concerns about how future generations will acquire essential expertise, [in particular] tacit knowledge—practical insights that resist codification and are critical for workplace success. While automation delivers immediate productivity gains, it can undermine long-term growth by hindering younger workers’ acquisition of tacit skills. Back-of-the-envelope calculations suggest AI-driven entry-level automation could lower the long-run annual growth rate of U.S. per capita output by 0.05 to 0.35 percentage points, depending on its scale. AI co-pilots—systems providing access to tacit-like expertise once obtained only through direct experience—can partially offset these losses by assisting individuals who fail to develop adequate skills early in their careers, but may also weaken junior workers’ incentives to engage in hands-on learning. These findings challenge the view that AI will automatically lead to higher economic growth, highlighting the need to safeguard—or deliberately create—entry-level opportunities to fully realize AI’s potential.

Takeaways by Macro Roundup® AI

  1. Back-of-the-envelope calculations suggest AI-driven automation of entry-level work could lower the long-run annual growth rate of U.S. per capita output by 0.05 to 0.35 percentage points, depending on the scale of automation.
  2. By enabling senior workers to complete more tasks independently, AI may reduce the entry-level opportunities through which younger workers acquire tacit knowledge—practical insights that resist codification and are critical for workplace success.
  3. AI co-pilots can partially offset these losses by giving workers who fail to build skills early access to tacit-like expertise, but may also weaken junior workers' incentives to engage in hands-on learning.

Related Articles:

  • Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — 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.
  • Artificial Intelligence in the Knowledge Economy — The authors model artificial intelligence in the knowledge economy and find that non-autonomous AI acting only as a co-pilot tends to benefit the least knowledgeable workers most, while autonomous AI that can also act as a co-worker primarily benefits the most knowledgeable. Job-posting evidence shows declines in low-knowledge white-collar postings alongside increases in high-knowledge roles.
  • Generative AI at Work — A study of 5,179 customer support agents finds that access to a generative AI conversational assistant raised issues resolved per hour by 14% on average, with the largest gains for novice and low-skilled workers and minimal effect on experienced, highly skilled ones. The authors also find AI assistance improved customer sentiment, reduced requests for managerial intervention, and improved employee retention.

AI Summary. Inflation-adjusted US house prices are 2.5% below their 2022 peak. An affordability estimate finds that the monthly principal-and-interest payment on a $500,000 home rose 97% over four years, as house prices climbed 27% and 30-year fixed mortgage rates went from about 3.0% to 6.8%.

Bill McBride Calculated Risk
Date Posted:

Nationally, real house prices are now 2.5% below the 2022 peak and 10% above the 2006 peak. “Affordability” remains at levels last seen in the early 1980s, when 30-year mortgage rates were over 14%. @calculatedrisk

How much have house prices and mortgage payments changed since peak?

Core argument: Inflation-adjusted U.S. house prices stand 2.5% below their 2022 peak.

I’ve put together my own affordability index [using] median income from the Census Bureau (estimated 2024 and 2025), assumed a 15% down payment, and used a 2% estimate for property taxes, insurance and maintenance. This is probably low for high property tax states like New Jersey and Texas, and too high for lower property tax states. For house prices, I used the Case-Shiller National Index, Seasonally Adjusted (SA). Also, for the down payment - there wasn’t a significant difference between 15% and 20%. For mortgage rates, I used the Freddie Mac PMMS (30-year fixed rates). Here is what the index looks like (lower is more affordable). In June 2021, the payment on a $500,000 house, with a 20% down payment and 2.98% 30-year mortgage rates, would be around $1,681 for principal and interest. The monthly payment for the same house with house prices up 27% over four years and mortgage rates at 6.82% in May 2025, would be $3,305 - an increase of 97%! Almost double the payment for the same house!

Takeaways by Macro Roundup® AI

  1. Inflation-adjusted U.S. house prices stand 2.5% below their 2022 peak.
  2. The monthly principal and interest payment on a $500,000 house with 20% down rose 97%, from $1,681 in June 2021 at a 2.98% 30-year mortgage rate to $3,305 in May 2025 at 6.82%, with prices up 27%.
  3. The affordability index uses Census Bureau median income (2024 and 2025 estimated), a 15% down payment, a 2% estimate for property taxes, insurance and maintenance, the seasonally adjusted Case-Shiller National Index, and Freddie Mac PMMS 30-year fixed rates.

Related Articles:

  • Why Are Young Adults in the English-Speaking World So Unhappy? — The share of young adults regularly experiencing stress and anger has risen sharply in the US, Canada, UK, Ireland, Australia and New Zealand while remaining largely stable elsewhere in the West. Real house prices since 1995 are up 85% in the US and over 200% in the other five countries.
  • 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.
  • Rapidly Growing Treasury Supply Crowding Out Other Types of Credit Growth — Roughly half of all fixed income issuance coming to market over the past year has been US Treasuries, meaning investors must allocate a growing share of dollars to financing the government. The argument is that lower government debt would free up more funds for consumer borrowing and business investment.

AI Summary. Airbus's A320 family of single-aisle jets is poised to overtake Boeing's 737 as the most-delivered commercial aircraft in history, with 12,153 delivered since launch, according to aviation consultants Cirium. After years of a roughly even split, Airbus holds 61% of the single-aisle market by order backlog and 72% by deliveries, while Boeing leads in wide-body aircraft.

Sylvia Pfeifer Financial Times
Date Posted:

Airbus is now at par with Boeing as measured by cumulative deliveries, though the A320 launched 20 years after the 737. Boeing still leads in larger wide-body aircraft.

Has Airbus overtaken Boeing in the single-aisle jet market?

Core argument: Airbus's A320 family, with 12,153 delivered since launch according to aviation consultants Cirium, is poised to overtake Boeing's 737 as the most popular commercial aircraft in history.

The A320 family of single-aisle jets, typically used on short and medium-haul flights, is now poised to overtake the 737 as the most popular commercial aircraft in history with 12,153 delivered since launch, according to aviation consultants Cirium. The success of the A320 family has been the driving force behind Airbus’s ascendancy in its five-decade rivalry with its US competitor. For years, the two companies had a roughly 50:50 split of the market for commercial single-aisle aircraft. But by the end of last year, Airbus held a market share of 61% measured by order backlog and 72% by deliveries, according to Cirium. Boeing still leads in larger, wide-body aircraft types.

Takeaways by Macro Roundup® AI

  1. Airbus's A320 family, with 12,153 delivered since launch according to aviation consultants Cirium, is poised to overtake Boeing's 737 as the most popular commercial aircraft in history.
  2. Airbus held 61% of the single-aisle market by order backlog and 72% by deliveries at the end of last year, according to Cirium, after years in which the two makers split the market roughly 50:50.
  3. Boeing still leads in larger wide-body aircraft types, while the A320 family has driven Airbus's ascendancy in the five-decade rivalry between the two manufacturers.

Related Articles:

  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.
  • China Steps Up Drive To Break Boeing and Airbus Grip on Plane Market — China's state-backed planemaker Comac has its subsidised C919 single-aisle jet flying domestic routes with Air China, China Eastern and China Southern, and is expanding to a route between Shanghai and Hong Kong. Aviation consultancy IBA projects Comac can lift output from one to 11 aircraft a month, delivering almost 2,000 C919s by 2040.
  • Crises at Boeing and Intel Are a National Emergency — Intel and Boeing, once benchmarks for high-quality, demanding manufacturing, declined because of their own mistakes rather than cheap foreign competition. Because leading U.S. tech firms' software and devices depend on advanced semiconductors fabricated under contract, especially by Taiwan Semiconductor Manufacturing Co., Chinese subjugation of Taiwan could leave the U.S. tech sector at Beijing's mercy.

AI Summary. US aluminum prices have risen above other international markets, with the US Midwest delivery premium up 81% and the all-in US price near $4,200 a ton versus roughly $2,600 on the London Metal Exchange. The US has only four operating smelters, and domestic capacity is insufficient to meet demand given high energy costs and long lead times for new plants.

Yvonne Yue Li and Joe Deaux Bloomberg
Date Posted:

US aluminum prices are now 48% higher than Europe’s and 56% higher than Japan’s.

Are tariffs raising US aluminum prices above international markets?

Core argument: The US Midwest premium for aluminum delivery has jumped 81% since early June, pushing the US price to almost $4,200 a ton versus roughly $2,600 a ton on the London Metal Exchange.

Aluminum prices in the US have been rising above other international markets since January due to the tariff threat. The so-called US Midwest premium – the amount added to global price benchmarks to deliver the metal to that region – jumped 81% since early June. Aluminum trades around $2,600 a ton on the London Metal Exchange. After adding the Midwest premium, the US price is almost $4,200 a ton. In spite of the surge, prices still haven’t entirely factored in the new tariffs. Alcoa, the largest US producer, said in July that US tariffs on Canadian shipments in the first half cost the company $135 million. “The tariffs are already starting to reshape global aluminum flows, particularly affecting producers in Canada,” said Ewa Manthey, a commodity strategist at ING Groep NV.“ Despite the tariffs, the US aluminum industry remains constrained — only four operating smelters exist. Domestic capacity is insufficient to meet demand, and new plants face high energy costs and long lead times.

Takeaways by Macro Roundup® AI

  1. The US Midwest premium for aluminum delivery has jumped 81% since early June, pushing the US price to almost $4,200 a ton versus roughly $2,600 a ton on the London Metal Exchange.
  2. Alcoa, the largest US aluminum producer, said in July that US tariffs on Canadian shipments cost the company $135 million in the first half, while ING commodity strategist Ewa Manthey said the tariffs are already reshaping global aluminum flows, particularly affecting Canadian producers.
  3. The US aluminum industry has only four operating smelters, with domestic capacity insufficient to meet demand and new plants facing high energy costs and long lead times.

Related Articles:

  • The Boom in New Steel Mills Is Outpacing Demand — 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.
  • 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.
  • 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.

Saturday, August 30, 2025

AI Summary. Research on enterprise generative AI finds high adoption but rare transformation: only 5% of enterprises have AI tools integrated into workflows at scale, and layoffs attributed to the technology are limited. The authors attribute the gap to tools that don't learn or integrate well, with internal builds failing twice as often as purchased ones.

Aditya Challapally, Chris Pease, Ramesh Raskar and Pradyumna Chari Massachusetts Institute of Technology
Date Posted:

An MIT analysis finds that of the $30-40B in enterprise investment into GenAI, “95% of organizations are getting zero return.”

Why has high enterprise AI adoption produced so little business transformation?

Core argument: Only 5% of enterprises have generative AI tools integrated into workflows at scale, and 7 of 9 sectors show no real structural change, despite high adoption.

Five Myths About GenAI in the Enterprise. 1. AI Will Replace Most Jobs in the Next Few Years → Research found limited layoffs from GenAI, and only in industries that are already affected significantly by AI. There is no consensus among executives as to hiring levels over the next 3-5 years. 2. Generative AI is Transforming Business → Adoption is high, but transformation is rare. Only 5% of enterprises have AI tools integrated in workflows at scale and 7 of 9 sectors show no real structural change. 3. Enterprises are slow in adopting new tech → Enterprises are extremely eager to adopt AI and 90% have seriously explored buying an AI solution. 4. The biggest thing holding back AI is model quality, legal, data, risk → What's really holding it back is that most AI tools don't learn and don’t integrate well into workflows. 5. The best enterprises are building their own tools → Internal builds fail twice as often.

Takeaways by Macro Roundup® AI

  1. Only 5% of enterprises have generative AI tools integrated into workflows at scale, and 7 of 9 sectors show no real structural change, despite high adoption.
  2. Some 90% of enterprises have seriously explored buying an AI solution, countering the view that enterprises are slow to adopt new technology.
  3. Internally built AI tools fail twice as often, and the main constraint on adoption is that most AI tools do not learn or integrate well into workflows, rather than model quality, legal, data, or risk concerns.

Related Articles:

  • Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — 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.
  • Automation, AI, and the Intergenerational Transmission of Knowledge — By allowing senior workers to complete tasks independently, artificial intelligence may reduce entry-level opportunities and impede younger workers' acquisition of tacit knowledge, the practical expertise that resists codification. The authors estimate this could lower the long-run annual growth rate of U.S. per capita output by 0.05 to 0.35 percentage points, depending on scale.
  • Back to Our Regularly Scheduled Programming — The four largest US hyperscalers spent $440bn on capital expenditure and research in 2024, with $596bn projected for 2025, a 35% increase, leaving large gaps between AI spending and AI revenues. These firms account for more than half of all capital expenditure growth in the US equity market.