Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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 is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “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
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, September 4, 2025

AI Summary. Industries more exposed to trade policy uncertainty are estimated to have cut imports of intermediate goods and increased automation, along with higher productivity partly reflecting that automation. The estimated relationship between industry employment and trade policy uncertainty exposure is close to zero.

Hamid Firooz, Sylvain Leduc, and Zheng Liu Federal Reserve Bank of San Francisco
Date Posted:

Between 2004 and 2022, US industries dependent on foreign inputs responded to increases in a news-based measure of Trade Policy Uncertainty (TPU) by increasing automation, leading to a rise in labor productivity with no net effect on employment.

Does trade policy uncertainty push exposed industries toward automation?

Core argument: Industries more exposed to trade policy uncertainty showed greater reductions in imported intermediate goods and larger increases in automation following heightened uncertainty, in industry-level data running through 2022 that excludes the most recent surges.

Figure 4 reports the estimated relationships of an industry’s robot density, imports of intermediate goods, productivity, and employment with the industry’s relative exposure to TPU. [The TPU index is based on the frequency of articles in major U.S. newspapers that discuss economic policy uncertainty and mention trade policy. “Relative” means that TPU is interacted with] the industry’s initial exposure to trade measured by the share of imported intermediate goods in gross output at the start of our sample in 2004. Our industry-level data are available through 2022, [so the sample doesn't include] the most recent surges in TPU. Following heightened TPU, industries that are more exposed to TPU experienced greater reductions in imported intermediate goods and larger increases in automation. Those industries also experienced a boost in productivity, partly reflecting the rise in automation. However, the estimated relationship between an industry’s employment and its exposure to TPU is close to zero, suggesting that the employment effects of TPU for firms in exposed industries are not much different from less-exposed [ones], likely because automation leads to the elimination of some jobs and the creation of others.

Takeaways by Macro Roundup® AI

  1. Industries more exposed to trade policy uncertainty showed greater reductions in imported intermediate goods and larger increases in automation following heightened uncertainty, in industry-level data running through 2022 that excludes the most recent surges.
  2. Industries more exposed to trade policy uncertainty also saw a boost in productivity, partly reflecting the rise in automation.
  3. The estimated relationship between an industry's employment and its exposure to trade policy uncertainty is close to zero, likely because automation eliminates some jobs while creating others.

Related Articles:

  • What Would It Take to Bring Back US Manufacturing? Part 1: America’s Structural Headwinds — The US imports roughly 40% of the goods it consumes, directly and through imported inputs, with labor-intensive goods like apparel almost entirely imported. The authors argue America's main comparative disadvantage is its cost of production, driven mainly by labor costs, with real estate costs and a strong dollar also contributing.
  • 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.
  • How AI & Robots are Smashing Economics, and Why It Matters — As artificial intelligence and robots make wages less responsive to employment conditions, the link between tight labor markets and inflation weakens, undermining central banks' inflation-targeting frameworks. The author argues central banks would then need far larger interest-rate moves to achieve the same effect, producing more volatile and less predictable outcomes.

AI Summary. One-month implied volatility for US Treasuries rose 12.12 points over three days on an Intercontinental Exchange gauge, the largest such rolling increase since the announcement of reciprocal tariffs. US spending and tax cut plans are projected to worsen the country's finances unless tariff revenues are sustained.

Masaki Kondo Bloomberg
Date Posted:

The one-month implied volatility for Treasuries jumped 12.12pp over the past 72 hours, the most on a rolling basis since “Liberation Day.”

Are fiscal concerns driving a sharp jump in Treasury volatility?

Core argument: One-month implied volatility for Treasuries rose 12.12 points over three days on an Intercontinental Exchange Inc. gauge, the largest rolling increase since the period following "Liberation Day" on April 2.

One-month implied volatility for Treasuries jumped 12.12 points over the last three days, according to a gauge from Intercontinental Exchange Inc. That’s the most on a rolling basis since the same period following “Liberation Day” on April 2, when President Donald Trump announced reciprocal tariffs. The Trump administration’s spending and tax cut plans are projected to worsen the country’s finances, unless revenues from tariffs are sustained.

Takeaways by Macro Roundup® AI

  1. One-month implied volatility for Treasuries rose 12.12 points over three days on an Intercontinental Exchange Inc. gauge, the largest rolling increase since the period following "Liberation Day" on April 2.
  2. President Donald Trump announced reciprocal tariffs on April 2, and the period that followed produced the prior comparable jump in Treasury implied volatility.
  3. The Trump administration's spending and tax cut plans are projected to worsen U.S. finances unless tariff revenues are sustained.

Related Articles:

  • Trump Signals Imminent Supreme Court Appeal to Protect Tariffs — 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.
  • 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.
  • 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. A French government confidence vote is expected to be lost, with the likely outcome a newly appointed government, though fresh elections remain possible. The authors project slower fiscal adjustment, with the deficit easing from 5.4% to 5.2% in 2026, adding to debt and raising the risk of credit rating changes.

Sven Stehn Goldman Sachs
Date Posted:

Goldman believes it is likely the French government will lose next week’s confidence vote, slowing fiscal consolidation. They foresee the French “deficit edging down from 5.4% this year to 5.2% of GDP in 2026.”

Will political instability slow French deficit reduction and pressure credit ratings?

Core argument: France's fiscal deficit is now expected to edge down only from 5.4% this year to 5.2% in 2026, which further pushes up debt and raises the risk of credit rating adjustments.

French Prime Minister Bayrou’s unexpected call for a confidence vote on September 8 has reintensified political risks in France. Given commentary by the opposition parties, the government is very likely to lose the vote. In this case, we expect President Macron to appoint a new government but new elections before year-end are also possible. Fiscal adjustment is now likely to be even slower—with the deficit edging down from 5.4% this year to 5.2% in 2026—which further pushes up debt and raises the risk of credit rating adjustments. That said, we left our French growth forecast unchanged—as a bigger deficit mitigates slightly tighter financial conditions—and see a more balanced medium-term outlook for France.

Takeaways by Macro Roundup® AI

  1. France's fiscal deficit is now expected to edge down only from 5.4% this year to 5.2% in 2026, which further pushes up debt and raises the risk of credit rating adjustments.
  2. French Prime Minister Bayrou's call for a September 8 confidence vote is very likely to end in defeat given opposition party commentary, after which President Macron is expected to appoint a new government, though new elections before year-end are also possible.
  3. The French growth forecast is left unchanged, as a bigger deficit mitigates slightly tighter financial conditions, with a more balanced medium-term outlook for France.

Related Articles:

  • Back to the Barricades, and the Bond Spreads — The gap between French and German 10-year government bond yields is near the highs reached during France's political crises, and French stocks have resumed sharp underperformance versus the rest of Europe. France's finance minister warned the country might need assistance from the International Monetary Fund.
  • France Is A Symptom of ECB Yield Caps — In the euro zone, high-debt countries run larger budget deficits than low-debt ones. The author argues that European Central Bank backstops eliminate the risk of a debt crisis and therefore any political incentive to pursue unpopular spending cuts or tax increases, with France's fiscal standoff a symptom.
  • 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.

AI Summary. Japan and Germany both have 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP versus just above 60%, a gap attributed to the Bank of Japan's large-scale bond purchases. As the Bank of Japan steps back from capping long-term yields, Japan's 30-year yield is likely to rise further.

Robin Brooks Robin Brooks Substack
Date Posted:
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Brooks argues that upward pressure on global long bond yields is due to budget deficits and the fading of QE. Noting QE’s strong downward pressure on Japanese yields, he argues “there’s still lots of room for yields to rise from artificially low levels.”

Do central bank bond purchases explain why high debt brings low yields?

Core argument: Japan and Germany both carry 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP in Japan last year versus just above 60% in Germany.

The chart illustrates just how important the [fading of the cumulative effect of QE] is. The chart shows 30-year government bond yields on the vertical axis and gross government debt in percent of GDP on the horizontal axis. I’ve highlighted the Euro zone countries in red, the rest of the G10 in blue, and Japan and Germany in black. Japan and Germany have special significance in this chart because they both have 30-year government bond yields around 3.3%, but debt levels are wildly different. Japan had gross government debt of 240% of GDP last year, while Germany stood just above 60%. The fact that Japan doesn’t have a higher yield is entirely due to huge QE purchases by its central bank. As the Bank of Japan increasingly steps back from capping longer-term yields, Japan’s 30-year yield is likely to rise a lot further.

Takeaways by Macro Roundup® AI

  1. Japan and Germany both carry 30-year government bond yields near 3.3% despite gross government debt of 240% of GDP in Japan last year versus just above 60% in Germany.
  2. The author attributes Japan's lack of a higher yield than Germany, despite far larger debt, entirely to huge QE purchases by the Bank of Japan.
  3. As the Bank of Japan steps back from capping longer-term yields, the author expects Japan's 30-year yield to rise a lot further.

Related Articles:

  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
  • Our Thoughts on Large US Deficits and Their Impact on Bond Yields — Total borrowing in the US is about average despite high government deficits, as high public borrowing has contributed to the need for higher interest rates that have depressed private sector borrowing. Risk premiums on long-dated debt look about average, with no market signs that economic or debt limits are currently being hit.
  • Global Debt Report 2025 — About 60% of fixed-rate government debt in advanced economies maturing by 2027 — roughly $9tn — was issued before the recent interest-rate tightening, with weighted average yields below 2% versus projected 10-year rates near 3.6%, implying refinancing at nearly double the original cost. France, Spain, the UK, and the US face heightened vulnerability, with maturing debt exceeding 15% of GDP.

AI Summary. The US had 1,135 billionaires worth about $5.7tn, up from 927 four years earlier, with the 100 richest holding nearly $3.86tn, according to wealth-intelligence firm Altrata. Roughly 300 made their fortunes in banking and finance versus about 110 in technology, and a third inherited much or all of their wealth.

Inti Pacheco and Theo Francis Wall Street Journal
Date Posted:

According to a WSJ analysis, there were 1,135 billionaires in the US in 2024, worth a collective $5.7T. ~⅓ of American billionaires inherited much or all of their wealth.

How many US billionaires are there, and where did their wealth originate?

Core argument: The U.S. had 1,135 billionaires as of 2024, up from 927 in 2020, collectively worth about $5.7 trillion, according to wealth-intelligence firm Altrata.

There were 1,135 billionaires in the U.S. as of 2024—up from 927 in 2020, according to data from Altrata, a wealth-intelligence firm. Collectively, these people are worth about $5.7 trillion. The 100 richest billionaires account for nearly $3.86 trillion in wealth—more than half the total. Just three men—Elon Musk, Bezos and Mark Zuckerberg—account for almost $1 trillion of it. Despite those outsize Silicon Valley fortunes, most U.S.-based billionaires didn’t make their wealth in tech. About 300 came from banking and finance, compared with roughly 110 from the tech sector. Another 75 came from real estate. A third of billionaires inherited much or all of their wealth, Altrata said. There is just one Rockefeller on the list, but 50 billionaire heirs of five companies hold roughly $830 billion total. These individuals account for nearly 15% of all the billionaires’ wealth.

Takeaways by Macro Roundup® AI

  1. The U.S. had 1,135 billionaires as of 2024, up from 927 in 2020, collectively worth about $5.7 trillion, according to wealth-intelligence firm Altrata.
  2. The 100 richest U.S. billionaires hold nearly $3.86 trillion, more than half the total, with Elon Musk, Jeff Bezos and Mark Zuckerberg alone accounting for almost $1 trillion.
  3. About 300 U.S. billionaires made their fortunes in banking and finance, compared with roughly 110 in tech and 75 in real estate, and Altrata says a third inherited much or all of their wealth.

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.
  • The Gilded Age and Beyond: The Persistence of Elite Wealth in American History — The authors find that most extremely wealthy Americans fall out of the top tail within their lifetimes, and that grandparental wealth is associated with reaching the top 1% in a non-linear way. Still, over 90% of grandchildren of top 1% grandfathers did not reach that level.
  • Family, Education, and Sources of Wealth Among the Richest Americans — Analysis of the Forbes 400 finds that fewer of the richest Americans inherited their wealth or grew up wealthy than in the 1980s and 1990s, with more starting businesses from upper-middle-class backgrounds. The authors link this shift to education and skills applied in scalable industries such as technology, finance, and mass retail.

AI Summary. China has ordered its solar industry to curb overcapacity and price-cutting as six of its largest cell and panel makers reported combined first-half losses that doubled from a year earlier to Rmb20.2bn ($2.8bn), following record profits earlier. China controls about 90% of global solar cell manufacturing capacity, and its output exceeds combined domestic and overseas demand.

Edward White, Wang Xueqiao, and Cheng Leng Financial Times
Date Posted:

In the face of widening losses, China has ordered the solar sector to rein in overcapacity. China controls ~90% of the world’s solar cell manufacturing capacity; that capacity has outpaced current global demand.

Is China intervening to curb overcapacity and price-cutting in solar?

Core argument: Combined first-half losses at six of China's largest solar cell and panel makers doubled to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to Wind.

China has ordered the solar sector to rein in overcapacity and cut-throat pricing as the biggest manufacturers suffer billions of dollars in losses. Six of the largest Chinese cell and panel makers saw their combined first-half losses double to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to financial information provider Wind. The losses compare with record profits in 2022 and 2023. Solar is one of the industries at the heart of Beijing’s concerns about “involution”, which refers to excess production fuelling a race to the bottom in prices. China controls about 90% of the world’s solar cell manufacturing capacity and boasts the industry’s most advanced technology. Factories in China produced 588 gigawatts of solar cells last year, surpassing domestic demand of 277GW and overseas demand of 174GW, according to Natixis data. The utilisation rate of Chinese solar module factories was 54%, according to Goldman Sachs data.

Takeaways by Macro Roundup® AI

  1. Combined first-half losses at six of China's largest solar cell and panel makers doubled to Rmb20.2bn ($2.8bn) from a year earlier, with all but one reporting widening losses, according to Wind.
  2. Beijing has ordered the solar sector to rein in overcapacity and cut-throat pricing, reflecting its concerns about "involution," in which excess production fuels a race to the bottom in prices.
  3. Chinese factories produced 588GW of solar cells last year against domestic demand of 277GW and overseas demand of 174GW, according to Natixis, with module factory utilisation at 54%, according to Goldman Sachs.

Related Articles:

  • China Struggles To Break Its Addiction To Manufacturing — China's manufacturing investment continues to rise, up 7.5% this year after a 9.5% increase the prior year, and one Chinese academic estimates the country's share of global manufacturing value-added could climb to 40% from about 27%. Chinese leadership has publicly questioned whether every province needs to develop artificial intelligence, computing power, and electric vehicles, criticizing excessive price competition.
  • Xi Overcapacity Fight Leaves Economy Vulnerable Without Stimulus — China's total debt has risen to over 300% of gross domestic product from a little over 200% a decade ago, and with the main policy rate at 1.4%, the central bank has limited room to cut. Price declines are more widespread than in past deflationary episodes, and large-scale stimulus remains off the table.
  • What’s New About Involution? — 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.

Friday, September 5, 2025

AI Summary. The authors argue that research crediting neighborhoods with causing better child outcomes confuses causation with parental self-sorting, since more affluent, better-educated, and more stable families tend to move to good neighborhoods before their children are born. Their analysis of Danish population data found the same sorting pattern as in the United States.

James Heckman and Sadegh Eshaghnia Wall Street Journal
Date Posted:
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Heckman argues that contrary to Chetty’s research, local geography has little causal effect on children’s adult outcomes in the US. Studies that find otherwise reflect parental self-selection.

Do neighborhoods cause better child outcomes, or do families sort themselves?

Core argument: The authors argue that neighborhood-effects research falsely attributes disparities in outcomes across locations to the causal effect of neighborhoods, when the differences stem from the parents who self-sort into those neighborhoods.

Advocates of [relocating struggling families to residential areas with better conditions] ignore serious flaws in the research. The methods used in this literature falsely link the disparity of outcomes across locations to the causal effect of neighborhoods. In reality, the difference is due to the parents who self-sort into neighborhoods. Those who move to better neighborhoods early on tend to be more affluent, more educated and more likely to have intact families. They move to better neighborhoods with people similar to themselves, just as later movers, who are less affluent and less educated, move to less affluent neighborhoods. Focusing on the family rather than the neighborhood changes the conversation around intergenerational mobility. In our 2022 study on lessons for America from Denmark, we analyzed data collected by Denmark’s government statistics agencies for the entire population, similar to census data in the U.S. As with Americans, more-affluent and better-educated Danish are more likely to move to good neighborhoods before children are born. Less-educated and less-affluent families that relocate later in their children’s lives tend to be less stable than early movers, who are less likely to experience divorce or a change in household composition.

Takeaways by Macro Roundup® AI

  1. The authors argue that neighborhood-effects research falsely attributes disparities in outcomes across locations to the causal effect of neighborhoods, when the differences stem from the parents who self-sort into those neighborhoods.
  2. Families who move to better neighborhoods early tend to be more affluent, more educated and more likely to have intact families than those who relocate later in their children's lives.
  3. A 2022 study of Danish government statistics covering the entire population found that, as in the U.S., more-affluent and better-educated Danes are likelier to move to good neighborhoods before children are born, while later movers are less stable.

Related Articles:

  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility* — The authors find that children's economic mobility improves across birth cohorts in communities where parental employment rates increase, with larger effects for children who move to such communities at younger ages. The relationship is strongest for the parental employment rates of peers in a child's own birth cohort, suggesting it is mediated by social interaction.
  • Lessons from Denmark about Inequality and Social Mobility — Denmark's intergenerational educational mobility resembles that of the U.S. despite its extensive welfare and equalizing social policies, with cognitive test scores of Danish children correlating similarly with parental income across cohorts born in 1958 and 1988. The evidence suggests family background and neighborhood effects shape educational outcomes in ways universal service provision does not offset.
  • Transmission of Family Influence — The authors estimate substantially higher intergenerational persistence using expected lifetime resource measures than using traditional income measures. They estimate that, measured at ages 30–35, almost 80% of male children have higher disposable income than their fathers did, about 70% have higher consumption, and around 60% have greater expected lifetime resources.

AI Summary. The US foreign-born population reached 51m, or 15.4% of the total, exceeding the previous high set in 1910. Estimated lifetime fiscal impact varies by education: an immigrant arriving at 25 without a high school degree imposes a $246,000 cost, while one with a graduate degree contributes $795,000.

Pia Orrenius, Alan Viard, and Madeline Zavodny American Enterprise Institute
Date Posted:
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An AEI analysis finds immigrants with a high school degree or less have a negative net fiscal impact. These immigrants are less of a burden than their native peers as they don’t qualify for as much public assistance.

Does an immigrant's education level determine their lifetime fiscal impact?

Core argument: An immigrant without a high school diploma arriving at age 25 imposes an estimated lifetime fiscal cost of $246,000, while the average immigrant with a graduate degree makes an estimated lifetime fiscal contribution of $795,000.

The US foreign-born population hit 51 million [in 2024], and its share of the total population reached 15.4%, exceeding the previous high set in 1910. The estimated fiscal impact of natives and immigrants varied considerably by education. An immigrant who had not completed high school and arrived in the US at age 25 imposed a lifetime fiscal cost of $246,000, while the average immigrant who had a graduate degree made a lifetime fiscal contribution of $795,000. Most of the variation in long-run fiscal impacts by education comes from the immigrants themselves, not from their descendants, because the children and later descendants of immigrants tend to converge to the US average.

Takeaways by Macro Roundup® AI

  1. An immigrant without a high school diploma arriving at age 25 imposes an estimated lifetime fiscal cost of $246,000, while the average immigrant with a graduate degree makes an estimated lifetime fiscal contribution of $795,000.
  2. The US foreign-born population reached 51 million in 2024 and 15.4% of the total population, exceeding the previous high set in 1910.
  3. Most of the variation in long-run fiscal impacts by education comes from immigrants themselves rather than their descendants, since children and later descendants of immigrants tend to converge to the US average.

Related Articles:

  • Two New Estimates of the Fiscal Impact of Immigration — Estimates of immigrants' fiscal impact depend heavily on the assumptions used: the lifetime fiscal impact of a 22-year-old high school dropout shifts from negative $315,000 under one set of assumptions to a small negative number under another. The author argues the accounting approach common in this literature understates immigrants' contribution to fiscal sustainability.
  • Immigration Policy and Its Macroeconomic Effects in the Second Trump Administration — The authors project net migration for the year to range from about −525,000 to 115,000, with zero or negative net migration more likely, reducing GDP growth by 0.3–0.4 percentage points. They project immigration policy will become more restrictive the following year before net migration rebounds in subsequent years.
  • America’s Immigration Mess: An Illustrated Guide — Current Population Survey estimates indicate America's foreign-born population surpassed 50m for the first time and exceeded 15% of the national population, above the prior peak of 14.8% recorded in 1890. Mass immigration during that earlier wave was associated in contemporary opinion with widening income and wealth gaps and depressed wages for less-skilled native-born men, and sweeping national restrictions followed.

AI Summary. Foreign capital flowed out of U.S. markets during the global financial crisis rather than in; the dollar's rally instead reflected U.S. money market funds and banks pulling back dollar loans to foreign banks and carry traders. The yen's simultaneous rally points to a carry-trade unwind rather than reserve-currency demand.

Brad Setser Council on Foreign Relations
Date Posted:

The dollar rally observed in 2008 was driven by repatriation of US money overseas, partly from unwinding carry trades, not inflows from foreign investors, Setser argues. “Investors should not assume that the dollar will rally in future instability.”

Why did the dollar rally while foreign capital flowed out?

Core argument: Foreign capital flowed out of U.S. markets in late 2008, contradicting the assumption that the dollar's rally during the global financial crisis reflected foreign investors moving funds into the United States.

Because the dollar (somewhat surprisingly) rallied during the crisis [i.e. the GFC], there is an assumption that foreign investors moved funds into the U.S. That isn’t quite true. Capital from abroad flowed out of the U.S. market in late 2008. The disaggregated chart tells a clear story of reduced foreign demand for U.S. assets amid the crisis. [This is what ] produced the bid for dollar assets. U.S. money market mutual funds that had lent to foreign (mostly European) banks wanted their money back, [as did] American banks that had lent out dollars to carry traders betting on the continued decline of the dollar relative to emerging economies. Put differently, the dollar was one of the funding currencies for a host of carry trades prior to the global financial crisis, as the dollar had been in a sustained slump and U.S. rates were relatively low. The dollar, as well as the yen. It is not a coincidence that the yen also rallied during the global financial crisis. That to me is a critical clue. Most attribute the ‘08 yen rally to a carry unwind, rather than a bid for the yen as a “reserve” currency. That could be said for the dollar as well. Investors should not assume that the dollar will rally in future instability.

Takeaways by Macro Roundup® AI

  1. Foreign capital flowed out of U.S. markets in late 2008, contradicting the assumption that the dollar's rally during the global financial crisis reflected foreign investors moving funds into the United States.
  2. The dollar's crisis bid came from U.S. money market mutual funds recalling loans to foreign, mostly European, banks and U.S. banks pulling back dollars lent to carry traders betting against the dollar.
  3. The yen also rallied during the global financial crisis, a move most attribute to a carry unwind rather than demand for the yen as a reserve currency, suggesting investors should not assume the dollar will rally in future instability.

Related Articles:

  • The International Role of the U.S. Dollar – 2025 Edition — The US dollar accounted for 58% of disclosed global official foreign reserves, versus 20% for the euro and 2% for China's renminbi, and roughly 50% of international payments made through the SWIFT messaging system. About 55% of international claims and 60% of liabilities are denominated in dollars, a share relatively stable since 2000.
  • Dollar Downgrade — The author argues that rising 10- and 30-year US Treasury yields do not show up in long-term inflation expectations, judging by the spread between inflation-indexed and non-indexed Treasury bonds. The author attributes the increase instead to a shift in demand away from long-dated US debt, reinforcing higher long-term real interest rates.
  • Are Foreigners Selling US Assets (Part II) — Proprietary flow tracking shows foreign bond flows into US assets, an outlier low in one month, have substantially normalized, suggesting an allocation shift away from dollar assets may have peaked. The authors argue traditional fundamentals, such as the US business cycle and Federal Reserve policy, will matter more for any further dollar weakness.

AI Summary. The Federal Reserve's Beige Book survey of regional business conditions reported a surge of data center construction, a rare bright spot in commercial real estate, alongside related increases in energy demand. Data centers are profitable and predictable electricity customers but add load in step increases to a system that cannot smoothly add new power sources.

Paul Kedrosky Applied Complexity
Date Posted:

Citing reports from the Atlanta and Kansas City Feds of data center construction “causing a step increase in regional electricity loads.” Kedrosky suggests that power is the biggest constraint on continued datacenter capex at the current rate.

Is data center construction lifting commercial real estate while straining power supply?

Core argument: The Beige Book noted a "surge of data center construction" as a rare bright spot in commercial real estate, in particular in the Philadelphia, Cleveland, and Chicago Districts.

Nationally, the report noted a “surge of data center construction”, a rare bright spot in commercial real estate, in particular in the Philadelphia, Cleveland, and Chicago Districts. And, not surprisingly, it cited sharp related increases in energy demand, in particular in Atlanta and Kansas City, due to data centers significantly causing a step increase in regional electricity loads. To put this in a kind of context, here is a graph of data center mentions organized by Beige Book edition over the last two years. I have added a helpful up-and-to-the-right arrow to the figure. Data centers are profitable and predictable [electrical] customers, but they also represent step function load increases in a system that can't smoothly add new sources of power.

Takeaways by Macro Roundup® AI

  1. The Beige Book noted a "surge of data center construction" as a rare bright spot in commercial real estate, in particular in the Philadelphia, Cleveland, and Chicago Districts.
  2. The Beige Book cited sharp increases in energy demand tied to data centers, in particular in the Atlanta and Kansas City Districts, where data centers contributed to step increases in regional electricity loads.
  3. Data centers are profitable and predictable electricity customers but represent step-function load increases in a system that cannot smoothly add new sources of power.

Related Articles:

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AI Summary. Social media has expanded who produces and broadcasts political information, and an analysis of the ideological positions of those sharing political content finds extreme views on both left and right are heavily over-represented relative to traditional media, where moderate positions were well-represented. The author argues this has eroded norms that kept radicals on the fringe.

John Burn-Murdoch Financial Times
Date Posted:
Is Database:
Database

John Burn-Murdoch hypothesizes that rising populism reflects “an unveiling of the electorate’s unfiltered inclinations,” with extreme views, both left and right, better reflected in social, as opposed to traditional, media.

Has social media over-represented extreme views relative to traditional media?

Core argument: An analysis of the ideological positions of people sharing political content on social media finds extreme views of both left and right heavily over-represented, whereas traditional media catered to a range of views with moderate positions well-represented.

Social media has dramatically expanded the pool of people producing and broadcasting information, and in doing so the range of views and narratives people are exposed to. My analysis of the ideological positions of those who share political content on social media shows that exactly this has happened. Whereas traditional media catered to a range of views, with moderate positions well-represented, extreme views — of both left and right — are heavily over-represented on social media. This proliferation of views and narratives formerly considered beyond the pale, spread via individuals and platforms outside the control of erstwhile political and media powers, has shattered norms that previously kept radicals on the fringe.

Takeaways by Macro Roundup® AI

  1. An analysis of the ideological positions of people sharing political content on social media finds extreme views of both left and right heavily over-represented, whereas traditional media catered to a range of views with moderate positions well-represented.
  2. Social media has expanded the pool of people producing and broadcasting information, widening the range of views and narratives to which audiences are exposed.
  3. The spread of views formerly considered beyond the pale, via individuals and platforms outside the control of established political and media powers, has shattered norms that previously kept radicals on the fringe.

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AI Summary. Satellite images and other open-source material examined by The Wall Street Journal show China building air and naval facilities along its eastern coast, including a large base for amphibious warships and a multibillion-dollar airport about 3 miles from front-line Taiwanese islands. Analysts say the sites would strengthen China's position in an invasion of Taiwan.

Niharika Mandhana and Camille Bressange Wall Street Journal
Date Posted:

China is undertaking a large-scale infrastructure build on its eastern coast, including new naval bases for amphibious vessels with hardened fuel tanks. Michael Dahm, a retired U.S. Navy intelligence officer, argues “they expect this to be bombed.”

How would new coastal air and naval sites aid invading Taiwan?

Core argument: Satellite images and other open-source material examined by The Wall Street Journal show China building air and naval sites along its eastern coast, including a multibillion-dollar airport roughly 3 miles from front-line Taiwanese islands.

China is undertaking a large-scale build-out of infrastructure along its eastern coast, including air and naval sites that show its growing readiness for a potential conflict over Taiwan. Satellite images and other open-source material examined by The Wall Street Journal illustrate how these facilities would strengthen China’s hand if it launched an invasion of the island democracy. Beijing claims Taiwan as its territory and has pledged to take it, by force if necessary. The sites range from a large new base for amphibious warships to a multibillion-dollar airport that sits around 3 miles from front-line Taiwanese islands. “All of it goes to supporting China’s one military planning scenario, which is a Taiwan scenario,” said Michael Dahm, a retired U.S. Navy intelligence officer and senior resident fellow at the Mitchell Institute for Aerospace Studies who closely tracks these projects.

Takeaways by Macro Roundup® AI

  1. Satellite images and other open-source material examined by The Wall Street Journal show China building air and naval sites along its eastern coast, including a multibillion-dollar airport roughly 3 miles from front-line Taiwanese islands.
  2. China's coastal build-out includes a large new base for amphibious warships, and The Wall Street Journal's review indicates such facilities would strengthen Beijing's hand if it launched an invasion of Taiwan.
  3. Michael Dahm, a retired U.S. Navy intelligence officer and senior resident fellow at the Mitchell Institute for Aerospace Studies, said all of the construction supports China's one military planning scenario, a Taiwan scenario.

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