Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


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
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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.

Tuesday, September 2, 2025

AI Summary. U.S. sectors with greater exposure to large language models are estimated to have seen statistically significant gains in total wages paid, employment, and hourly wages, with larger hourly wage gains for younger and more educated workers in exposed occupations. Sectors intensive in human–AI collaboration tasks gained employment and wages, while those with more directly automatable tasks saw declines.

Andrew Johnston and Christos Makridis Social Science Research Network
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Over 2021 – 2024, sectors that were more exposed to LLMs saw significant overall increases in wages and employment following LLMs’ release, mainly for young, educated workers, reflecting cases where AI augments, rather than substitutes for, human effort.

How does language model exposure affect sector employment and wages?

Core argument: U.S. state–industry pairs with higher generative AI task exposure show statistically significant gains in the wage bill, employment, and hourly wages in the years surrounding the public release of large language models, alongside more insignificant increases in establishments.

This paper provides early empirical evidence on the labor market and output effects of generative AI exposure across U.S. [state and industry pairs] in the years surrounding the public release of large language models. Using task-level LLM exposure indices and variation in pre-existing occupational structure pre-2020, we find that sectors with higher exposure experienced statistically significant gains in the wage bill, employment, and hourly wages alongside more insignificant increases in establishments. These results are consistent with individual-level data from the Census Bureau: hourly wages rise more in exposed occupations for younger and more educated workers, which is consistent with early adoption, faster skill acquisition, or task reallocation toward workers better positioned to integrate AI into workflows. We also find that decomposing exposure matters. Sectors intensive in tasks that require human–AI collaboration show gains in both employment and wages, while sectors with higher shares of directly automatable tasks experience declines in wage bills and headcount. Aggregated exposure measures can conceal offsetting movements within industries between complementary and substitutable roles.

Takeaways by Macro Roundup® AI

  1. U.S. state–industry pairs with higher generative AI task exposure show statistically significant gains in the wage bill, employment, and hourly wages in the years surrounding the public release of large language models, alongside more insignificant increases in establishments.
  2. Sectors intensive in tasks requiring human–AI collaboration show gains in both employment and wages, while sectors with higher shares of directly automatable tasks experience declines in wage bills and headcount.
  3. Census Bureau individual-level data show hourly wages rising more in exposed occupations for younger and more educated workers, which is consistent with early adoption, faster skill acquisition, or task reallocation.

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.
  • 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.
  • 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. Chinese factories install about 280,000 industrial robots a year, half the global total, with roughly half made by domestic producers that undercut foreign rivals on price, lifting China's robot-to-worker density above Germany's. Trade data show China's global export share in labour-intensive goods rose, including small manufactured goods up 9 percentage points to 52.3%.

Ryan McMorrow, Haohsiang Ko and William Langley Financial Times
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Btw 2019 and 2023, automation helped China increase its export share in labor-intensive sectors. During that period, Chinese manufacturers added ~280,000 industrial robots every year, 50% of the global total.

Are low-cost domestic robots expanding China's export share in labor-intensive goods?

Core argument: Chinese factories install roughly 280,000 industrial robots annually, half the global total, lifting China's robot-to-worker density above Germany's and closing in on leader South Korea.

China’s homegrown robot makers are driving a wave of low-cost automation that is helping local factories churn out more goods at lower prices, allowing the country to increase its share of exports, even in labour-intensive products. Chinese factories are installing about 280,000 industrial robots every year, or half the global total, bringing the country’s robot-to-worker density ahead of Germany and closing in on leader South Korea. Data from Chinese research group MIR Databank shows that about half of those robots are made by domestic groups such as Chengdu CRP Robot Technology, which has won local customers by undercutting global rivals on price. Trade data compiled by Harvard’s Growth Lab shows China grew its global export share in a swath of labour-intensive industries from 2019 to 2023. The country’s global export share of small manufactured goods, such as brooms, mops and pens, rose 9 percentage points to 52.3% over the four-year period. Furniture exports gained about 1.5 percentage points of market share, while China’s proportion of the world’s toy exports rose from 54.3% to 56.9%.

Takeaways by Macro Roundup® AI

  1. Chinese factories install roughly 280,000 industrial robots annually, half the global total, lifting China's robot-to-worker density above Germany's and closing in on leader South Korea.
  2. China's global export share of small manufactured goods such as brooms, mops and pens rose 9 percentage points to 52.3% between 2019 and 2023, according to trade data compiled by Harvard's Growth Lab.
  3. About half of the robots installed in China are made by domestic groups such as Chengdu CRP Robot Technology, which has won local customers by undercutting global rivals on price, according to MIR Databank.

Related Articles:

  • America Is Missing The New Labor Economy – Robotics Part 1 — Building an identical robotic arm in the US costs about 2.2x more than in China, and US-labeled components still depend heavily on Chinese parts and materials with no scalable alternative. The author argues China is the only country positioned to capture full-scale intelligent robotic automation, which would let it outcompete the US across production.
  • Global Robot Density in Factories Doubled in Seven Years — Global factory robot density reached a record 162 robots per 10,000 manufacturing employees, more than double the level of seven years earlier. The European Union averages 219 units per 10,000 employees, North America 197, and Asia 182, with Korea, Singapore, mainland China and Japan among the ten most automated economies.
  • China is Suffering its Own ‘China Shock’ — Academic analysis of 12 labour-intensive Chinese manufacturing industries estimates average employment fell about 14%, or nearly 4mn jobs, between 2011 and 2019, with textile roles down 40%; a further analysis of the same sectors found 3.4mn more jobs lost through 2023. Researchers argue industrial upgrading and automation are cutting demand for lower-skilled workers and depressing their wages.

AI Summary. The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the International Emergency Economic Powers Act — a statute that primarily authorizes sanctions and does not mention tariffs — was unlikely to have been intended by Congress to grant the president nearly unlimited tariff authority. The White House is preparing a Supreme Court appeal.

Tony Romm and Ana Swanson New York Times
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The administration will appeal to the Supreme Court an appellate court ruling that the International Emergency Economic Powers Act does not allow the President to impose broad import taxes.

Does emergency powers law give the president unlimited tariff authority?

Core argument: The U.S. Court of Appeals for the Federal Circuit ruled 7–4 against President Trump's use of the International Emergency Economic Powers Act, finding it unlikely Congress intended to grant the president nearly unlimited authority to impose tariffs under that law.

[Last] Friday, the U.S. Court of Appeals for the Federal Circuit ruled 7 to 4 against Mr. Trump and his use of the International Emergency Economic Powers Act, finding that it was unlikely that Congress had intended to grant the president nearly unlimited authority to impose tariffs as part of that law. The statute, which primarily allows the president to impose sanctions, does not specifically mention tariffs. But Mr. Trump has invoked it repeatedly to issue withering global duties, most recently in an executive order imposing taxes on imports from about 90 countries in early August. President Trump is preparing to ask the Supreme Court to overturn [the] ruling that found many of his punishing tariffs to be illegal, claiming that any erosion in his power to wage a global trade war would inflict severe financial damage on the United States. An administration official, who spoke on condition of anonymity, confirmed the White House’s legal plans on Tuesday.

Takeaways by Macro Roundup® AI

  1. The U.S. Court of Appeals for the Federal Circuit ruled 7–4 against President Trump's use of the International Emergency Economic Powers Act, finding it unlikely Congress intended to grant the president nearly unlimited authority to impose tariffs under that law.
  2. The International Emergency Economic Powers Act primarily allows the president to impose sanctions and does not specifically mention tariffs, though Trump invoked it repeatedly, most recently in an early-August executive order taxing imports from about 90 countries.
  3. Trump is preparing to ask the Supreme Court to overturn the ruling, claiming that any erosion in his power to wage a global trade war would inflict severe financial damage on the United States, according to an administration official.

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.
  • Trump’s Tariffs Are Making Money. That May Make Them Hard to Quit — Tariff revenue may make future administrations of either party reluctant to roll back tariffs, since repeal would add to the federal debt and replacing the revenue with other taxes would require a politically risky vote in Congress. Democrats may also be tempted to use tariff revenue to fund new social programs.
  • Tariffs are Dumb Enough to (Almost) Work — A universal 15% tariff on imported goods could raise roughly $300–$400bn annually, a fraction of what a value-added tax would generate but real revenue given U.S. imports of about $4tn. The author argues tariffs are a poorly designed form of consumption tax that could build political groundwork for replacing them with a more efficient value-added tax.

AI Summary. A Wall Street Journal-NORC poll found that 25% of Americans say they have a good chance of improving their standard of living, a record low in surveys dating to 1987, while nearly 70% said the idea that hard work leads to getting ahead no longer holds true or never did.

Lindsay Ellis and Aaron Zitner Wall Street Journal
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A WSJ-NORC poll finds the % of Americans who say they have “a good chance of improving their standard of living” fell to 25%, a record low since 1987. The survey results are more negative than predicted by macro conditions, suggesting unmeasured fears.

Do Americans still believe hard work leads to getting ahead?

Core argument: The share of Americans saying they have a good chance of improving their standard of living fell to 25% in the WSJ-NORC poll, a record low in surveys dating to 1987.

A new Wall Street Journal-NORC poll finds that the share of people who say they have a good chance of improving their standard of living fell to 25%, a record low in surveys dating to 1987. More than three-quarters said they lack confidence that life for the next generation will be better than their own, the poll found. Nearly 70% of people said they believe the American dream—that if you work hard, you will get ahead—no longer holds true or never did, the highest level in nearly 15 years of surveys. Republicans in the survey were less pessimistic than Democrats, reflecting the longstanding trend that the party holding the White House has a rosier view of the economy. An index that combined six poll questions found that 55% of Republicans, as well as 90% of Democrats, held a negative view of prospects for themselves and their children.

Takeaways by Macro Roundup® AI

  1. The share of Americans saying they have a good chance of improving their standard of living fell to 25% in the WSJ-NORC poll, a record low in surveys dating to 1987.
  2. Nearly 70% of respondents said the American dream—that hard work leads to getting ahead—no longer holds true or never did, the highest level in nearly 15 years of surveys, and more than three-quarters lacked confidence the next generation's life will be better.
  3. An index combining six poll questions found 90% of Democrats and 55% of Republicans held a negative view of prospects for themselves and their children, reflecting the longstanding trend that the party holding the White House views the economy more favorably.

Related Articles:

  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.
  • Asymmetric Amplification and the Consumer Sentiment Gap — Consumer sentiment surveys show Republican respondents' views swing about ±15 index points relative to predicted levels depending on which party holds the presidency, while Democrats' views swing only about ±6 points. The authors estimate that adjusting for this asymmetric amplification shrinks the gap between observed and predicted consumer sentiment by 30%.

AI Summary. Gold reached a record above $3,500 a troy ounce amid a weak dollar and expectations of a US interest rate cut. Prices have nearly doubled since the start of 2023 as central banks add holdings and investors seek an inflation hedge, with gold now 20% of global official reserves.

William Sandlund Financial Times
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Gold prices hit a record high of $3,508.70/troy ounce; prices have doubled since the beginning of 2023. Last year, gold became the world’s second-most common central bank reserve asset after the dollar.

Are a weak dollar and rate-cut expectations driving gold to records?

Core argument: Spot gold rose 0.9% to a record $3,508.70 a troy ounce in early Asian trading before paring gains to $3,497, surpassing the previous high set in April after President Donald Trump's "liberation day" tariffs.

Gold prices jumped to an all-time high on Tuesday, surpassing a previous record in April after President Donald Trump’s “liberation day” tariffs, amid a weak dollar and expectations of a US interest rate cut this month. The spot price of gold rose 0.9 per cent to $3,508.70 a troy ounce during early trading in Asia, before paring gains to trade at $3,497. Gold prices have nearly doubled since the start of 2023 as central banks increase holdings and investors look for a hedge against inflation. Last year, the metal overtook the euro to become the world’s second-most common central bank reserve asset after the dollar, accounting for 20% of global official reserves.

Takeaways by Macro Roundup® AI

  1. Spot gold rose 0.9% to a record $3,508.70 a troy ounce in early Asian trading before paring gains to $3,497, surpassing the previous high set in April after President Donald Trump's "liberation day" tariffs.
  2. Gold prices have nearly doubled since the start of 2023 as central banks increase holdings and investors seek a hedge against inflation, with a weak dollar and expectations of a US interest rate cut supporting the move.
  3. Gold overtook the euro to become the world's second-most common central bank reserve asset after the dollar, accounting for 20% of global official reserves.

Related Articles:

  • Gold Overtakes Euro as Global Reserve Asset, ECB Says — Gold has overtaken the euro as a global reserve asset, with central bank gold holdings reaching 36,000 tons, near the mid-1960s peak of 38,000 tons, helped by a 30% rise in the gold price. The European Central Bank finds countries geopolitically close to China and Russia accumulated gold more than others.
  • How Gold Became the World’s Refuge from Uncertainty — Gold prices reached a record intraday high in real terms, surpassing the prior 1980 peak, with roughly a 30% gain over the year. Central banks have bought more than 1,000 tonnes net annually for three years — record levels — led by emerging markets including China, India and Turkey as they scale back dollar exposure.
  • Taking Stock: Dollar Assets, Gold, and Official Foreign Exchange Reserves — Gold accounts for about 10% of aggregate official foreign exchange reserves, roughly its level in the early 2000s. International Monetary Fund country data indicate most added official gold holdings came from a few central banks, with over half of reported accumulation from China and Russia and about a quarter from several emerging markets.

AI Summary. Regrouping US college majors to match Chinese disciplines yields a 2:1 ratio of science and engineering to humanities and social sciences, the same ratio as in China. The author argues America's building slowdown reflects structural economic shifts—urbanization reached 70% by 1960 and 85% by 2020, shifting needs toward maintenance—rather than a lawyerly culture.

Jonathon Sine Cogitations
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Jonathon Sine argues China “is moving beyond its breakneck industrial prime, facing similar dilemmas to those America confronted in the 1960s and 70s.” The ratio of science/engineering to humanities undergraduate majors is 2:1 in both the PRC and US.

Does America's building slowdown reflect structural shifts rather than lawyerly culture?

Core argument: Regrouping US college majors according to Chinese disciplines yields a 2:1 ratio of science/engineering to humanities/social sciences, the same ratio as in China when management is grouped with science/engineering in both.

Dan Wang’s “big idea” [is] “China is an engineering state, building big at breakneck speed, in contrast to the United States’ lawyerly society, blocking everything it can, good and bad.” I re-group US college majors according to Chinese disciplines to allow for rough comparison. Surprisingly, the ratio of science/engineering to humanities/social sciences is 2:1, the same as in China (if one groups management with science/engineering, as I also do for China). As with China today, America’s breakneck building phase was decidedly winding down by the 1960s. Urbanization went from 40% in 1900 to 70% by 1960, and grew much more incrementally over the next 60 years to 85% by 2020. The country simply did not need to continue building dams, expressways, and energy production facilities at breakneck pace. It became much more a matter of maintaining and upgrading (which has not gone well, at least according to the American Society of Civil Engineers’ report card). The American [building/investment slowdown that started after the 1970s] may be more about structural economic shifts than lawyers.

Takeaways by Macro Roundup® AI

  1. Regrouping US college majors according to Chinese disciplines yields a 2:1 ratio of science/engineering to humanities/social sciences, the same ratio as in China when management is grouped with science/engineering in both.
  2. US urbanization rose from 40% in 1900 to 70% by 1960, then grew more incrementally to 85% by 2020, with America's breakneck building phase winding down by the 1960s.
  3. The US building and investment slowdown that began after the 1970s may owe more to structural economic shifts than to lawyers, qualifying Dan Wang's contrast between China's engineering state and America's lawyerly society.

Related Articles:

  • Industrial Colossus: China vs 1950s America — China's growth in its share of global manufacturing has slowed from roughly 1.5 percentage points per year in the early 2010s to just over 0.5 percentage points annually, about one-third the earlier pace. The author argues China's share of global manufacturing is likely near its peak.
  • The Real China Model — China generates more electricity annually than the United States and European Union combined, having added capacity equivalent to the United Kingdom's total supply each year. Electricity makes up nearly 30% of China's energy use, versus 22% in the US and 21% globally, and its share is growing about 6% a year.
  • America’s Housing Affordability Crisis and the Decline of Housing Supply — Housing production intensity has fallen substantially, especially in fast-growing Sunbelt markets once known for building, converging toward the low rates long seen on the coasts and in declining industrial centers. The authors argue incumbent-controlled regulation explains the weakening link between high prices, high demand areas, and new construction.