Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…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
  • “…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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…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
  • “…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
  • “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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, September 18, 2025

AI Summary. Average US retail electricity prices have risen about 35% since 2020, while average wholesale electricity costs have nearly doubled, with wholesale prices far more volatile. Wholesale location marginal prices consist of energy generation costs (typically 80–90% of the total), transmission congestion, and transmission losses, with a price spike partly driven by a large rise in natural gas prices.

Brian Potter Construction Physics
Date Posted:

Since 2020, average electricity prices in the US have risen by ~35%, driven by a near doubling of wholesale prices, in turn due to a sharp rise in natural gas prices, demand surges in locales with constrained capacity, and transmission congestion costs.

How have wholesale electricity prices moved relative to retail prices?

Core argument: Average wholesale electricity costs in the US have nearly doubled since 2020, while average consumer electricity prices have risen around 35%, with wholesale prices following a roughly parallel trend but with much greater volatility.

Since 2020, average electricity prices in the US have increased by around 35%. Broadly, the trend in wholesale prices seems to roughly parallel the trend we see in consumer electricity prices [but with much greater volatility]. Average wholesale electricity costs have nearly doubled since 2020. The location marginal price [LMP] is typically made up of three separate components: energy, congestion, and losses [in the transmission system, generally small]. Energy is the portion of the LMP that comes from actually generating the electricity. It’s how much will be paid to add one additional megawatt-hour to the grid. and more often than not will make the largest fraction of the LMP (80-90%). The huge price spike around 2022 [e.g.] seems to be driven in part by an enormous rise in natural gas prices. Congestion is the portion that comes from transmission congestion. Transmission lines can only carry so much electricity, and when lines reach their capacity there may not be a path from a given source of generation to a given source of electricity demand. The congestion portion of LMP reflects the costs incurred by having to buy more expensive electricity than would be required if there were no transmission constraints

Takeaways by Macro Roundup® AI

  1. Average wholesale electricity costs in the US have nearly doubled since 2020, while average consumer electricity prices have risen around 35%, with wholesale prices following a roughly parallel trend but with much greater volatility.
  2. The location marginal price of electricity comprises energy, congestion, and transmission losses, with the energy component — the payment for adding one additional megawatt-hour to the grid — typically making up 80–90% of the total.
  3. The wholesale electricity price spike around 2022 appears driven in part by an enormous rise in natural gas prices, while the congestion component reflects the cost of buying more expensive power when transmission lines reach capacity.

Related Articles:

  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • Electricity 2025 — US electricity demand is projected to grow about 2% annually over 2025-2027, an upward revision from an earlier 1% forecast. A study commissioned by the US Department of Energy found data centre electricity use rose from about 60 TWh in 2014 to 176 TWh in 2023, and could reach 325-580 TWh by 2028.
  • How A Power Shortage Could Short-Circuit Nvidia’s Rise — Analysts estimate Nvidia will sell roughly 6m Blackwell and 5.5m GB chips over a two-year span, and that if half are installed and run at capacity in America they would add 25GW to power demand. Bernstein projects a US shortfall of 17–62GW by 2030 depending on chip efficiency; Morgan Stanley puts the gap at 45GW by 2028.

AI Summary. Generative AI revenues are estimated to be doubling annually, compared with pre-crash revenue growth of 22% for railways before the 1873 bust and 16% for telecoms, which implied doubling times of three and four years. The authors project generative AI revenue could reach $100bn, covering about 25% of that year's capital spending.

Azeem Azhar and Nathan Warren Exponential View
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Azhar & Warren conclude that the AI buildout is a “demand-led, capital intensive boom,” not a bubble, given capex relative to GDP and revenue, revenue growth, and funding quality. If revenues grow at half their 2024 pace, they will reach $100B by 2026.

How does AI revenue growth compare with past infrastructure booms?

Core argument: GenAI revenues are estimated to grow about twofold this year, a doubling time of roughly one year, versus 22% growth for railways in 1873 (doubling in three years) and 16% for telecom in the late 1990s (just over four years).

The problem in the railroad and telecom booms was that revenues ran out of momentum. Investment expects a return. After the railway bubble burst in 1873, revenue declined by 3% year over year. Telecoms did slightly better, declining 0.5%. Before the crashes, revenue growth was hardly explosive. Railways in 1873 expanded 22% – enough to double in three years. Telecom in the late 1990s managed only 16%, a doubling time of just over four years. By contrast, genAI revenues are still accelerating. By our estimates, genAI revenues will grow about twofold this year. And this is likely a conservative forecast. Our revenue growth gauge is an exponential one. It measures revenue doubling time in years; that is, at current growth rates, how long does it take for sector revenue to double? Here, genAI sits squarely in the green, doubling every year. If genAI revenues were to grow at even half the pace of last year, then, on my conservative forecast, they would reach $100 billion by 2026, covering about 25% of that year’s capex.

Takeaways by Macro Roundup® AI

  1. GenAI revenues are estimated to grow about twofold this year, a doubling time of roughly one year, versus 22% growth for railways in 1873 (doubling in three years) and 16% for telecom in the late 1990s (just over four years).
  2. After the railway bubble burst in 1873, sector revenue declined 3% year over year, while telecom revenue declined 0.5% after its crash.
  3. Growing at even half of last year's pace, genAI revenues would reach $100 billion by 2026 on the author's conservative forecast, covering about 25% of that year's capex.

Related Articles:

  • Fair Shakes — Technology-sector capital spending has accounted for 35%–45% of US GDP growth over three quarters, implying that without it growth would be near 1% given weak consumption. Among S&P 500 companies, capital spending rose 24% and research and development 10%, but the median stock grew both by only 3%–4%.
  • Honey, AI Capex is Eating the Economy — Capital spending on AI data centers is around 20% of railroads' peak spending as a share of GDP and is rising quickly, having already surpassed the dot-com era peak in telecom investment. Unlike long-lived rail infrastructure, data centers are short-lived assets requiring frequent hardware replacement, and the capital is being reallocated from other sectors.
  • The Year-End Wake-Up: The ‘Chinese Sputnik’ That Demands Our Attention — Chinese AI company DeepSeek trained its Version 3 large language model for roughly $5.6m, about 100x cheaper than Meta's Llama 3, with performance comparable to Claude 3.5 Sonnet and interface access costing 12x less than Anthropic's. The author argues US chip export controls backfired by spurring leaner engineering, and that the gap between open-source and closed-source models is narrowing rapidly.

AI Summary. US undergraduate enrollment in degree- or certificate-seeking programs fell from 17.3m to 14.1m, a drop of nearly 20%, but the declines were concentrated in lower-quality institutions. Enrollment changes are strongly associated with measured student outcomes such as completion rates, loan repayment, and post-enrollment earnings, with the worst-performing quintile losing nearly half its enrollment.

Preston Cooper American Enterprise Institute
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Btw 2010 and 2023, enrollment at US colleges declined from 17.3mm to 14.1mm. 90% of the decline was driven by falling enrollment in the bottom two quintiles of schools. The top two quintile schools gained enrollment by 3% and 8%, respectively.

Are falling college enrollments concentrated in the worst-performing institutions?

Core argument: U.S. degree- or certificate-seeking undergraduate enrollment fell from 17.3 million in 2010 to 14.1 million in 2023, a drop of nearly 20%, with declines spread unevenly across institutions.

Between 2010 and 2023, the number of degree- or certificate-seeking undergraduates enrolled in America’s colleges and universities declined from 17.3 million to 14.1 million— a drop of nearly 20%. This report shows that the decline in college enrollment is not uniform across institutions. Some schools have seen far larger drops in enrollment, and others have enjoyed enrollment increases. These changes in enrollment are strongly associated with the college’s quality, as measured by quantifiable student outcomes such as completion rates, loan repayment rates, and earnings after enrollment. In the fall of 2010—the peak of US undergraduate enrollment—institutions in each of the five quintiles enrolled approximately 3.5 million students. But over the next 13 years, enrollment levels in each quintile diverged dramatically. Colleges in the worst quintile lost nearly half their undergraduate enrollment, which fell from 3.5 to 1.8 million between the fall of 2010 and the fall of 2023, the latest year of available data. Institutions in the second-worst quintile saw enrollment drop from 3.5 million to 2.2 million (a 36% drop), while enrollment in the middle quintile fell from 3.5 million to 2.6 million (a 26% drop).

Takeaways by Macro Roundup® AI

  1. U.S. degree- or certificate-seeking undergraduate enrollment fell from 17.3 million in 2010 to 14.1 million in 2023, a drop of nearly 20%, with declines spread unevenly across institutions.
  2. Colleges in the worst quintile by student outcomes lost nearly half their undergraduate enrollment, from 3.5 million in fall 2010 to 1.8 million in fall 2023, while the second-worst quintile fell 36% and the middle quintile 26%.
  3. The report finds enrollment changes strongly associated with college quality as measured by completion rates, loan repayment rates, and earnings after enrollment, with each of the five quintiles enrolling about 3.5 million students in fall 2010.

Related Articles:

  • Changes in the College Mobility Pipeline Since 1900 — Students from the bottom third of parental income now earn less than half the college enrollment wage premium of top-third students. The authors attribute this mainly to the rising relative value of research universities, lower-income students' diversion to community and for-profit colleges, and their shift from computer science and engineering into humanities.
  • Standardized Test Scores and Academic Performance at Ivy-Plus Colleges — An analysis of admissions and transcript records at Ivy-Plus colleges finds standardized test scores predict first-year college grades with a normalized slope 4x greater than high school grade point average, controlling for race, gender, and socioeconomic status. The authors find no evidence test scores underpredict college performance for students from less advantaged backgrounds.
  • Rising Graduate Joblessness Is Mainly Affecting Men. Will That Last? — The US unemployment rate for recent male graduates has risen from below 5% to 7% over the past year while the rate for recent female graduates is unchanged or slightly lower, leaving young male graduates jobless at the same rate as non-graduates. Entry-level coding employment, however, has rebounded.

AI Summary. The Federal Reserve lowered its benchmark interest rate by 25 basis points to 4–4.25% and signaled that another cut is very likely at the following meeting. The authors expect two additional 25 basis point cuts, followed by two more the next year bringing the rate to 3–3.25%, a path slightly more dovish than market pricing.

David Mericle Goldman Sachs
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Yesterday’s 25bp cut leaves the Funds Rate at 4–4.25%. Goldman Sachs forecasts an additional two cuts in October and December 2025, followed by two cuts in 2026, leading to a terminal rate of 3.0–3.25%.

Are more interest rate cuts likely at upcoming meetings?

Core argument: The FOMC cut the federal funds rate by 25bp to 4-4.25% at its September meeting and signaled that another cut in October is very likely.

The FOMC lowered the funds rate by 25bp to 4-4.25% at its September meeting today and hinted that another rate cut is very likely in October. We continue to expect 25bp cuts in October and December—with a 50bp cut possible if the labor market weakens more than we expect—followed by two cuts next year to 3-3.25%. Our probability-weighted Fed path remains a bit more dovish than market pricing.

Takeaways by Macro Roundup® AI

  1. The FOMC cut the federal funds rate by 25bp to 4-4.25% at its September meeting and signaled that another cut in October is very likely.
  2. Goldman Sachs expects 25bp cuts in October and December, with a 50bp cut possible if the labor market weakens more than anticipated, followed by two cuts next year to 3-3.25%.
  3. Goldman Sachs's probability-weighted Fed path remains somewhat more dovish than market pricing.

Related Articles:

  • Too Early — Markets are pricing interest-rate cuts about 70bps deeper than Federal Reserve officials' own projections, an outcome the author argues is unlikely with core inflation stabilized near 3%, wage growth at 4% versus 3% before the pandemic, and unemployment at a historically low 4.3%.
  • A Big, Not-So-Beautiful Inflation Picture — Wage growth for the lowest-paid quartile of US workers has slowed to just above the headline inflation rate, consistent with the view that companies are holding onto staff while showing little interest in bidding up pay for lower-skilled workers. With inflation not tamed and tariffs yet to feed through to employment and production decisions, the risk ahead is stagflation.
  • The Rising Tide of Government Interest Costs — A model of forward interest rate curves, projected deficits, and debt maturity structures estimates that government interest spending on marketable debt will rise across G10 economies by an average of 0.5 percentage points of GDP by 2029, with France, Japan, and the United States facing the largest increases.

AI Summary. China's urban unemployment rate for 16- to 24-year-olds excluding students rose to 18.9% from 17.8%, the highest since the National Bureau of Statistics revised its calculation method for the series. A record 12.2m university students graduated into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education and skills.

Xinyi Wu South China Morning Post
Date Posted:

China’s youth unemployment (16–24) rose to 18.9% in August, its highest level since the measure was adjusted in 2023. The unemployment rate for workers 25–29 also increased to 7.2% in August, up from 6.9% in July.

Is China's youth unemployment rising as record graduates enter the job market?

Core argument: China's urban jobless rate for those aged 16–24 excluding students rose to 18.9% in August from 17.8% in July, the highest since the data set was revised in 2023, according to the National Bureau of Statistics.

China’s urban youth unemployment rate rose last month to the highest level since the data set was adjusted in 2023. The jobless rate for those aged 16 to 24, excluding students, rose to 18.9% in August from 17.8% in July, according to data released by the National Bureau of Statistics on Wednesday. After the jobless rate for the demographic rose to an all-time high of 21.3% in June 2023, Beijing suspended the monthly data release for five months before introducing a revised method of calculating it for December 2023. A record 12.2 million university students graduated this summer, with the majority of them joining a job market strained by deflationary pressures and external uncertainties. Many of them are struggling to find roles that match their education level and skills.

Takeaways by Macro Roundup® AI

  1. China's urban jobless rate for those aged 16–24 excluding students rose to 18.9% in August from 17.8% in July, the highest since the data set was revised in 2023, according to the National Bureau of Statistics.
  2. After youth unemployment hit an all-time high of 21.3% in June 2023, Beijing suspended the monthly release for five months before adopting a revised calculation method beginning with December 2023 data.
  3. A record 12.2 million university students graduated in China this summer into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education level and skills.

Related Articles:

  • Our Revamped China Wage Tracker Shows Gradual Softening in Wage Growth — A revamped wage tracker estimates China's wage growth slowed to 4.2% year-over-year in the first quarter and 3.9% in the second, down from 4.5% in the prior fourth quarter and about 1 percentage point below official figures. The authors argue sluggish wage growth may weigh on consumption growth.
  • 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.
  • Xi Jinping Calls for Quality Jobs for Youth Instead of ‘Bitterness’ — China's leadership has ordered that providing "high-quality full employment" be an economic priority, with youth unemployment running at nearly three times the overall rate. Unemployment among 16-24 year-olds, excluding students, stood at 14.7% against an urban unemployment rate of 5%.

AI Summary. China classifies roughly 200m people as "flexible workers" without formal contracts, a group that makes up a quarter of the national workforce and two-fifths of the urban workforce. Unlike the West's service-focused gig economy, about 40m of these workers are paid by the day or week in factories, and semi-official estimates put 84m at online delivery and ride-hailing firms.

Economist Staff The Economist
Date Posted:

About ~200mm Chinese “flexible workers” without formal contracts account for ~25% of the overall workforce and 40% of the urban workforce.

How large is China's workforce without formal employment contracts?

Core argument: China's roughly 200m "flexible workers", a state category for those outside standard employment, lack formal contracts yet account for a quarter of the total workforce and two-fifths of it in cities.

[There are] 200m-odd people in China whom the state considers to be “flexible workers”, a broad category that includes all those who fall outside standard forms of employment. The group makes up what is called the “gig economy”. Its members do not have formal contracts, and yet they have become a crucial part of China’s labour supply, accounting for a quarter of the total workforce and two-fifths of it in cities. Unlike the West’s gig economy, which is almost entirely focused on services, roughly 40m of the make-or-break workers are paid by the day or week to work in factories. In China’s largest manufacturing complexes they can at times make up 80% of the workforce, according to a survey by Zhang Dandan of Peking University. Meanwhile, semi-official estimates suggest that 84m people work for online firms, delivering food and parcels or driving ride-share taxis. Many more are thought to do freelance internet marketing or work odd jobs in construction and restaurants.

Takeaways by Macro Roundup® AI

  1. China's roughly 200m "flexible workers", a state category for those outside standard employment, lack formal contracts yet account for a quarter of the total workforce and two-fifths of it in cities.
  2. Roughly 40m of China's gig workers are paid by the day or week to work in factories, and in the largest manufacturing complexes they can at times make up 80% of the workforce, according to a survey by Zhang Dandan of Peking University.
  3. Semi-official estimates suggest 84m people in China work for online firms, delivering food and parcels or driving ride-share taxis, with many more thought to do freelance internet marketing or odd jobs in construction and restaurants.

Related Articles:

  • Is It Me or the Economic System? Changing Evaluations of Inequality in China — Chinese survey respondents once cited lack of ability, lack of effort, and low education as the main explanations for poverty, with unequal opportunity ranking 5th and an unfair economic structure 9th. In a later survey, unequal opportunity ranked first and an unfair economic structure third, with education remaining second.
  • The ‘Invisible Wall’ Amplifying China’s Population Doom Loop — China's hukou household registration system restricts migrant workers' access to local services such as healthcare, education, and home purchases in major cities. While two-thirds of Chinese live in cities, only 48% hold urban residency rights, leaving roughly 250m people excluded from many urban benefits; rural disposable income is about $3,000 per capita versus over $7,000 in cities.
  • 2023 Letter — Rising numbers of Chinese nationals are being apprehended at the US-Mexico border, with US officers encountering around 1,000 in one month early in the year and nearly 5,000 by November. Most Chinese emigrants leave through legal means, going primarily to Singapore, Japan, and Thailand.

Friday, September 19, 2025

AI Summary. Global investors are continuing to buy US stocks and bonds while purchasing derivatives that hedge against further dollar declines, with Deutsche Bank reporting that flows into dollar-hedged exchange-traded funds holding US assets have outpaced unhedged funds for the first time this decade. Foreign investors own roughly $20tn of US stocks and about $14tn of US debt.

Ye Xie, Carter Johnson, and Anya Andrianova Bloomberg
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Year to date, the S&P 500’s return was 12.8% in dollar terms and 6% in yen terms; in euros, the return was – 1%. Hedged investment into US bonds and equities overtook unhedged holdings, according to Deutsche Bank.

Are foreign investors hedging currency risk while still buying US assets?

Core argument: Flows into dollar-hedged ETFs that buy US assets have outpaced unhedged funds since around mid-year, the first time this decade, a shift Deutsche Bank says occurred at an unprecedented clip.

It turns out that all the “Sell America” angst swirling in markets earlier this year was misplaced. The real mantra from global investors is more like “Hedge America” — that is, keep snapping up US stocks and bonds but do so while buying derivatives that protect those investments against any further declines in the dollar. Starting around mid-year, and for the first time this decade, flows into dollar-hedged exchange-traded funds that buy US assets have outpaced those into unhedged funds, according to Deutsche Bank AG, which said the shift occurred at an unprecedented clip. Government data showing foreign holdings of Treasuries rose to a record in July. Overseas investors collectively own about $20 trillion of US stocks and some $14 trillion in US debt, including Treasuries, mortgage and corporate bonds.

Takeaways by Macro Roundup® AI

  1. Flows into dollar-hedged ETFs that buy US assets have outpaced unhedged funds since around mid-year, the first time this decade, a shift Deutsche Bank says occurred at an unprecedented clip.
  2. Foreign investors collectively own roughly $20 trillion of US stocks and about $14 trillion of US debt, including Treasuries, mortgage and corporate bonds.
  3. Government data showed foreign holdings of Treasuries rose to a record in July.

Related Articles:

  • American Unexceptionalism — The S&P 500 has outperformed other developed-market equities by a cumulative 150% over the past fifteen years, but the authors attribute about 80% of that gap to a strengthening dollar and expanding relative valuations rather than fundamentals such as dividends, buybacks, and organic growth. U.S. valuations sit around the 90th percentile on price-to-earnings measures.
  • Foreign Investors In US Assets Rush For Protection Against Swings In Dollar — Hedged investments into US bonds and equities are outstripping unhedged holdings for the first time in four years, according to Deutsche Bank analysis, with about 80% of roughly $7bn flowing into foreign-domiciled US equity exchange traded funds over three months done on a hedged basis, up from about 20%. Falling US interest rates have made such currency hedges cheaper.
  • 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. US interest rates fell for roughly 40 years before the pandemic, allowing maturing high-coupon debt to be refinanced at lower rates and keeping federal interest expense manageable even as debt rose. Because Congressional Budget Office projections assume the 10-year Treasury yield drifts down to 3.8% from about 4.1%, the author argues its debt-service projections face upside risk.

Robin Brooks Robin Brooks Substack
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Robin Brooks argues that prior to the pandemic, US debt service was “manageable” even as debt soared, as older, higher-coupon debt was rolled over into lower-coupon debt. That dynamic has now reversed.

Do official debt-service projections understate the risk from rising bond yields?

Core argument: CBO assumes the 10-year Treasury yield drifts down to 3.8% from roughly 4.1% over the coming decade, which the author argues leaves upside risk, perhaps substantial, to CBO's debt service projections.

As the bottom right chart shows, US interest rates were on a 40 year downtrend in the run-up to COVID, which meant that high coupon debt was getting continuously replaced with low coupon debt, keeping the interest expense manageable even as debt soared. This accident of history has run its course. If anything, it’s likely that US and global interest rates are trending up from here, which could push our debt service much higher. CBO projections assume a slight downward trend for the 10-year Treasury yield over the coming decade (to 3.8% from around 4.1% currently). As a result, there’s very likely upside risk - perhaps substantially so - to CBO’s debt service projections. Our luck has run out.

Takeaways by Macro Roundup® AI

  1. CBO assumes the 10-year Treasury yield drifts down to 3.8% from roughly 4.1% over the coming decade, which the author argues leaves upside risk, perhaps substantial, to CBO's debt service projections.
  2. US interest rates fell over a 40-year downtrend before COVID, replacing high-coupon debt with low-coupon debt and keeping interest expense manageable even as debt soared.
  3. The author argues that the decades-long decline in rates has run its course and that US and global interest rates are likely trending up, which could push debt service much higher.

Related Articles:

  • How A Global Debt Crisis Starts — Far-forward government bond yields — what markets price for the 10-year yield 10 and 20 years ahead — have risen in Japan, the UK, France and Germany, with Japan's 10-year yield 20 years forward at 4.5%. The US 10y20y forward yield has fallen slightly, which the author attributes to safe-haven inflows.
  • 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.
  • 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.

AI Summary. Linking Dutch genetic data to tax records, the authors estimate that moving a person 10 percentiles higher in a genetic index raises their own income by 0.9 percentiles and their child's by 0.7 percentiles. They attribute about 50% of this to transmitted genes and the rest to environmental pathways.

Sjoerd van Alten, Silvia Barcellos, Leandro Carvalho, Titus Galama, et al. National Bureau of Economic Research
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A 10-percentile increase in a person’s polygenic index (PGI) raises that person’s income by 0.9 percentiles and that of their child by 0.7 percentiles; ~1/2 is direct genetic transmission, and ~ 1/2 the effect of parent’s genes on nurturing capacity.

How much of genetic influence on children's income comes through environment?

Core argument: Linking Dutch Lifelines Cohort genetic data to 2006–2022 tax records, the authors find that moving a reference 10 percentiles higher in the polygenic index distribution raises that person's own income by 0.9 percentiles and their offspring's by 0.7 percentiles.

We examine how the genetics of one generation influences the SES [Socioeconomic Status] of the next by linking genetic data from the Dutch Lifelines Cohort to tax records for 2006-2022. Figure 5 plots the next-generation genetic effect against the same-generation genetic effect for each SES measure. The 22.5-degree line represents a benchmark where the next-generation genetic effects are half as large as the same-generation genetic effects. The figure indicates a high degree of persistence in the effects of the reference’s genetics across generations: e.g. moving a reference 10 percentiles higher in the PGI distribution increases that reference’s own income by 0.9 percentiles, and their offspring’s income by 0.7 percentiles. For most outcomes, the markers lie closer to the 45-degree line than to the 22.5-degree line, suggesting that genetic transmission is not the sole mechanism through which one generation’s genetics affects the next. Genetic transmission explains about 50% of the total effect, while genotypic assortative mating contributes little. This implies that the remaining 50% must be attributed to genetic nurture—the influence of the reference’s genetics operating through environmental pathways, even when these genetic markers are not transmitted to the offspring.

Takeaways by Macro Roundup® AI

  1. Linking Dutch Lifelines Cohort genetic data to 2006–2022 tax records, the authors find that moving a reference 10 percentiles higher in the polygenic index distribution raises that person's own income by 0.9 percentiles and their offspring's by 0.7 percentiles.
  2. Genetic transmission explains about 50% of the total effect of one generation's genetics on the next generation's socioeconomic status, with genotypic assortative mating contributing little.
  3. The authors attribute the remaining 50% to genetic nurture, the influence of the reference's genetics operating through environmental pathways even when those genetic markers are not transmitted to the offspring.

Related Articles:

  • The Inheritance Of Social Status: England, 1600 to 2022 — Using a genealogical database of 422,374 English people with rarer surnames, the authors find social status persists strongly even among distant relatives, with status correlations declining by a constant factor of 0.79 per step in the lineage across all status measures and eras studied. The authors argue this constancy suggests social interventions have modest effects.
  • For Whom the Bell Curve Tolls: A Lineage of 400,000 English Individuals 1750-2020 Shows Genetics Determines Most Social Outcomes — A study of 402,000 English individuals across 1750–2020 estimates an intergenerational occupational status correlation of 0.88 and a genetic correlation between spouses of 0.76, which the authors interpret as a strong genetic basis for the persistence of social status. The authors argue that highly assortative mating around status genetics limits what policy can do to raise social mobility.
  • Like Great-Grandparent, Like Great-Grandchild? Multigenerational Mobility in American History — Using data on multiple ancestors, the authors estimate a small grandparent effect on children's status among white American families and conclude it largely reflects measurement error in the father's status rather than causal transmission. Including Black families raises estimated multigenerational status transmission, as racial economic gaps have converged more slowly than within-race family gaps.

AI Summary. Among US women born 1975–1979 who have completed childbearing, conservatives average 2.1 children, moderates 1.8, and liberals 1.5; among those born 1985–1989 the figures are 2.1, 1.9, and 1.7. Birthrates and marriage rates are lower for all ideological groups than before 1975.

Scott Yenor and Lyman Stone Institute for Family Studies
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Is Database:
Database

In county survey data of 12,316 female respondents born btw 1985 and 1989, those who identify as conservative have a completed fertility rate of 2.1, relative to moderates’ rates of 1.9, and liberals’ 1.7.

Do conservative women have more children than liberal women?

Core argument: Conservative women born 1975–1979 have a completed family size of 2.1 children, at replacement, compared with 1.8 for moderates and 1.5 for liberals in the same cohort.

Conservative women born between 1975 and 1979—women who are finished having children—have a completed family size of 2.1, right at replacement. Moderate women in the same age group have 1.8 children, and liberal women just 1.5. Narrower gaps exist between conservatives born between 1985 and 1989, who have a completed fertility rate of 2.1, while moderates are at 1.9 and liberals 1.7. Conservative women born between 1995 and 1999 have, so far, only had 0.7 children, the same as moderates. Liberals in the same cohort average 0.4 so far. Differences between conservative and liberal women should not be overstated. Birthrates are lower for all groups when compared to the state of fertility before 1975. Marriage rates for all groups are lower, too. Yet the differences are large enough that the parties ultimately appeal to manifestly different constituencies.

Takeaways by Macro Roundup® AI

  1. Conservative women born 1975–1979 have a completed family size of 2.1 children, at replacement, compared with 1.8 for moderates and 1.5 for liberals in the same cohort.
  2. Among women born 1985–1989, the ideological fertility gap narrows, with conservatives at 2.1 children, moderates at 1.9, and liberals at 1.7.
  3. Birthrates and marriage rates are lower for all ideological groups than before 1975, yet the differences are large enough that the parties appeal to manifestly different constituencies.

Related Articles:

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  • America’s Fertility Crash Reaches A New Low — US birth-rate declines have been concentrated in states that were historically the most fertile, including Alaska, North Dakota and Utah, while long-low-fertility states such as Connecticut and Massachusetts fell by less than the national average. States with above-average fertility a decade ago account for more than 80% of the national decline.
  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.