Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, January 27, 2026

AI Summary. Research defining an industry "run-up" as a cumulative return of 100% or more over two years finds that such run-ups do not predict unusually low average future returns, though they do raise the probability of a crash, defined as a 40% drawdown. Volatility, turnover, and equity issuance help predict those crashes.

Michael Mauboussin and Dan Callahan Morgan Stanley
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Evidence from 147 large US and international “runups” in an industry’s portfolio indicates that average post-runup returns are similar to the market average. The higher likelihood of a crash is offset by higher returns absent a crash.

Do large industry price run-ups predict lower future returns or crashes?

Core argument: Greenwood, Shleifer, and You identified 40 U.S. industry run-ups from 1926 to 2014 and 107 international sector run-ups from 1985 to 2014, defining a run-up as a cumulative return of 100% or more, absolute and relative to the market, over two years.

Greenwood, Shleifer, and You defined a run-up as a cumulative return of 100% or more, both absolute and relative to the market, over the prior two years for a value-weighted portfolio of stocks within an industry. Further, they specified that the industry’s absolute return had to be up 50% or more over the previous five years. The run-up started the first month that the conditions were met. They identified 40 such run-ups in the U.S. from 1926 to 2014 and 107 in international sectors from 1985 to 2014. Their headline finding was that Fama is right in the sense that a run-up does not predict unusually low future returns, on average. Exhibit 13 shows the results for run-ups of U.S. industries. On the left are the 24 months prior to the first month in which the industry’s return crosses their threshold of a run-up, and on the right is the price performance for the following 48 months. Just over half of the run-ups had a crash, defined as a 40% drawdown from any price in the two years following the first run-up. The average return of all episodes after run-ups was not dissimilar to the market overall, though run-ups increased the probability of a crash, and signals along the way, including volatility, turnover, and equity issuance, helped predict it. A separate paper found that crashes often followed sharp increases in invested capital, a measure of investment intensity.

Takeaways by Macro Roundup® AI

  1. Greenwood, Shleifer, and You identified 40 U.S. industry run-ups from 1926 to 2014 and 107 international sector run-ups from 1985 to 2014, defining a run-up as a cumulative return of 100% or more, absolute and relative to the market, over two years.
  2. Just over half of the run-ups were followed by a crash, defined as a 40% drawdown from any price in the two years after the run-up began, though average returns after run-ups were not dissimilar to the market overall.
  3. Volatility, turnover, and equity issuance helped predict crashes following run-ups, and a separate paper found that crashes often followed sharp increases in invested capital, a measure of investment intensity.

Related Articles:

  • Is It a Bubble? — Transformational technologies have historically generated excessive enthusiasm and investment, producing more infrastructure than needed, asset prices that prove too high, and losses for those funding them, while also accelerating adoption. AI enthusiasm is argued to fit this pattern, with debt financing having the potential to magnify the effects.
  • Predictable Financial Crises — Historical data indicate that when credit and asset prices grow rapidly over three years, the probability of a financial crisis within the next three years is 40%, versus 7% in stable periods. The authors find 63% of crises were preceded by such credit-market overheating, which also forecasts weaker medium-term economic growth.
  • Stocks Near Highest Valuations Since 1880 — The cyclically adjusted price-earnings ratio, which divides stock prices by the average of the past 10 years of inflation-adjusted earnings to smooth business-cycle swings, stands near its highest level since 1880. Because it uses a decade of earnings rather than one year, it is a gauge of sustainable earnings power.

AI Summary. Bond-market inflation forecasts and surging earnings expectations suggest Japan's rising government bond yields reflect economic normalization rather than an impending fiscal crisis. Japan's primary deficit is trending toward zero, it runs a current account surplus and holds more foreign assets than foreigners hold in Japan, and its central bank and finance ministry retain tools to counter unwanted yield spikes.

John Authers Bloomberg
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The sharp rise in Japanese yields may not spark an international crisis. It is partly post-slump normalization, extreme new stimulus may not materialize, and Japan’s debt is partially mitigated by its CA surplus and positive net investment position.

Do rising Japanese bond yields reflect normalization rather than fiscal trouble?

Core argument: Bond-market-implied inflation forecasts suggest traders assume Japan's endemic deflation is over, and surging earnings expectations show confidence in Corporate Japan, supporting the argument that JGBs reflect healthy economic normalization.

Inflation forecasts generated by the bond market suggest that traders are now assuming that Japan’s endemic deflation is over. Earnings expectations have surged, showing confidence in Corporate Japan. So there are reasonable arguments that JGBs reflect a healthy economic normalization. Arguments that a true fiscal crisis is in the offing hinge on Japan’s massive stock of debt and Takaichi’s determination to borrow more in a bid to get the economy moving. How likely is she to overplay her hand and overextend? Concerns over fiscal sustainability (and therefore fears of an imminent crisis) [may be] overdone: The LDP may fail to win a large majority in the Feb. 8 election. Takaichi is not Truss – Tokyo is clearly aware of bond market risk. The primary deficit is trending to zero. The BOJ and MOF have plenty of tools to address unwanted spikes in yields. Despite its huge pile of debt, Japan is stable. It maintains a current account surplus (unlike the US). Also unlike the US, it has a positive net international investment position, meaning that it holds more foreign assets than foreigners hold assets in Japan.

Takeaways by Macro Roundup® AI

  1. Bond-market-implied inflation forecasts suggest traders assume Japan's endemic deflation is over, and surging earnings expectations show confidence in Corporate Japan, supporting the argument that JGBs reflect healthy economic normalization.
  2. Fears of an imminent Japanese fiscal crisis rest on Japan's massive debt stock and Takaichi's determination to borrow more, though Japan's primary deficit is trending to zero and the LDP may fail to win a large majority in the Feb. 8 election.
  3. Japan maintains a current account surplus and a positive net international investment position, holding more foreign assets than foreigners hold in Japan, unlike the US, while the BOJ and MOF retain tools to address unwanted yield spikes.

Related Articles:

  • 2026 Japan Economic Outlook: Steady Fundamentals, Policy Risks Ahead — Japan's government debt-to-GDP ratio has continued to decline despite an ongoing primary deficit, because the government's interest payment rate (0.8%) is far below nominal GDP growth (3.9%), a gap the authors call the widest since 1980 and worth roughly -7 percentage points a year.
  • Japan’s Debt Puzzle: Sovereign Wealth Fund from Borrowed Money — Japan's public sector operates as a highly leveraged sovereign wealth fund, funding risky assets by borrowing from banks and depositors at below-market rates, with returns sustaining its debt-to-GDP ratio above 200% without primary surpluses. The authors argue the resulting duration and currency mismatches expose Japan to mark-to-market losses that could trigger a fiscal crisis or a run on the yen.
  • Five Charts On The Global Bond Market Sell-Off — Japan's debt overhang remains unaddressed, and the argument is that the yen is only in the early stages of debasement, with further depreciation ahead. On this view, the decoupling between interest rate differentials and the yen has much further to run, and policy will change only once yen devaluation forces it.

AI Summary. A G10 dollar index recalculated to exclude Japan shows the dollar has fallen below its earlier trading range, indicating broad-based dollar weakness. Sustained yen weakness had previously made the dollar appear stronger than it was.

Robin Brooks Robin Brooks Substack
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The Dollar is weakening against a variety of currency indices, with or without the yen and/or EMs. “No matter how you cut the data, the Dollar is tumbling.”

Has yen weakness been masking broad-based dollar decline?

Core argument: The G10 Dollar index has fallen below the range in which it traded during the second half of last year, a decline that holds whether or not Japan is included in the index.

The black line in the chart is the G10 Dollar index. The blue line modifies this index by dropping Japan. This mutes the Dollar drop of recent days, but this effect is outweighed by sustained Yen weakness in the months leading up to last week, when Yen weakness made the Dollar look stronger than it really was. The net effect of these two things is that the G10 Dollar has fallen below the range it traded in during the second half of last year. Across the board, the picture is therefore quite alarming. No matter how you “cut” the data, the Dollar is tumbling.

Takeaways by Macro Roundup® AI

  1. The G10 Dollar index has fallen below the range in which it traded during the second half of last year, a decline that holds whether or not Japan is included in the index.
  2. Excluding Japan from the G10 Dollar index mutes the Dollar's recent drop, but that effect is outweighed by sustained Yen weakness in the preceding months, which had made the Dollar look stronger than it was.

Related Articles:

  • Different Dollar Downside — The authors estimate the US dollar remains roughly 15% overvalued and argue a sharper depreciation could follow if US labor-market weakness forces deeper Federal Reserve rate cuts, particularly against a highly undervalued yen. They also flag a derating of US tech exceptionalism as a risk, since demand for US equities has helped fund the current account deficit.
  • The Debasement Trade Roars Back — Currencies of low-public-debt countries such as Switzerland and Sweden are showing increasing correlation with daily moves in gold and silver prices. Sweden's krona has traditionally been highly volatile without safe-haven attributes, a pattern the article attributes to the "debasement trade.
  • 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 U.S. Census Bureau estimates net international migration peaked at 2.7m in 2024 and fell to 1.3m in 2025, with a projected decline to roughly 321,000 in 2026 if current trends continue. The Bureau notes that continued trends would produce the first net negative migration in more than 50 years.

Census Staff United States Census Bureau
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New Census estimates suggest the overall US population grew by 1.8mm or .5% btw July 2024 and July 2025. Net migration was 2.7mm in 2024 and 1.3mm in 2025. They project net migration declining to 321,000 in 2026.

Is net international migration to the US falling sharply?

Core argument: U.S. net international migration fell from a peak of 2.7 million in 2024 to 1.3 million as of July 1, 2025, according to the Census Bureau's Vintage 2025 population estimates.

The U.S. Census Bureau released a new series of population estimates that reflect demographic change since the 2020 Census. International migration is one of the most dynamic sources of demographic change and that has certainly been the case this decade. The new Vintage 2025 estimates show a historic decline in net international migration (NIM). Specifically, NIM: 1. Peaked at 2.7 million in 2024. 2. Declined to 1.3 million in 2025 (as of July 1). 3. Is projected to further decline to approximately 321,000 in 2026 if current trends continue. Currently, the estimates of NIM are trending toward negative net migration. If those trends continue, it would be the first time the United States has seen net negative migration in more than 50 years.

Takeaways by Macro Roundup® AI

  1. U.S. net international migration fell from a peak of 2.7 million in 2024 to 1.3 million as of July 1, 2025, according to the Census Bureau's Vintage 2025 population estimates.
  2. The Census Bureau projects net international migration will decline further to approximately 321,000 in 2026 if current trends continue.
  3. Census Bureau estimates of net international migration are trending toward negative net migration, which if sustained would be the first net negative migration in the United States in more than 50 years.

Related Articles:

  • Macroeconomic Implications Of Immigration Flows In 2025 And 2026: January 2026 Update — The authors estimate that job growth consistent with full employment was 20,000–50,000 a month in the second half of 2025, while reported nonfarm payroll growth averaged about 14,500 and unemployment rose 0.3 percentage points. They project immigration policy changes will keep potential employment growth low, reducing GDP growth by roughly 0.2 percentage points in 2025 and 0.1 in 2026.
  • The Demographic Outlook: 2026 to 2056 — The Congressional Budget Office projects the US population rises from 349m to 364m between 2026 and 2056, with annual growth slowing from 0.3% over the next decade to 0.1% thereafter before reaching zero and then shrinking. Declining fertility is projected to push deaths above births starting in 2030, increasingly offsetting net immigration.
  • New Data Show Intensifying Unauthorized Immigration Decline, With Large Local Variations — Individual-level immigration court and parole data indicate net unauthorized immigration has turned increasingly negative, averaging -48,000 per month over the first seven months of the year and reaching -89,000 in July. The authors estimate this pace implies an annual total of -576,000, compared with the Congressional Budget Office's projection of -290,000.

AI Summary. Many quantum computers depend on dilution refrigerators, produced by a few small firms in the US, Britain and Finland, and on critical minerals such as niobium, concentrated in Brazil, and tantalum, mined in Africa and mostly processed in China. China has announced mass production of a domestic dilution refrigerator and has been buying niobium mines.

Chris Miller and Josh Zoffer Washington Post
Date Posted:

Chris Miller and Josh Zoffer caution that, depending on which quantum technologies mature, the US is facing several potential “chokepoints” in terms of exotic materials and processing needed to scale the technology.

Do supply chains for equipment and minerals constrain quantum computing leadership?

Core argument: Dilution refrigerators needed to cool many quantum computers are produced largely by a few small companies in the U.S., Britain and Finland, while Chinese media announced mass production of a homegrown dilution refrigerator.

Most quantum systems require intense cooling. Today, the dilution refrigerators that are needed to cool many types of quantum computers are largely produced by a few small companies in the U.S., Britain and Finland. Chinese media recently announced mass production of a homegrown dilution refrigerator. Beijing is not leaving this to chance. Quantum computing will require greater use of certain exotic materials. The risks of relying on China for rare earths and critical minerals, many of which are required for quantum systems, have become clear. Depending on which specific quantum technologies mature, we may need more of the critical mineral niobium, which today is found almost exclusively in Brazil. China’s already begun buying up niobium mines. Tantalum, another important material for some quantum systems, is largely produced in Nigeria, Rwanda and the Democratic Republic of the Congo, and mostly processed in China. Quantum computing may still sound like science fiction, but the scale-up phase is approaching. The race is now about supply chains as much as science and engineering.

Takeaways by Macro Roundup® AI

  1. Dilution refrigerators needed to cool many quantum computers are produced largely by a few small companies in the U.S., Britain and Finland, while Chinese media announced mass production of a homegrown dilution refrigerator.
  2. Niobium, a critical mineral that some maturing quantum technologies would require in greater quantities, is found almost exclusively in Brazil, and China has begun buying up niobium mines.
  3. Tantalum, important for some quantum systems, is largely produced in Nigeria, Rwanda and the Democratic Republic of the Congo and mostly processed in China.

Related Articles:

  • Why China Keeps Winning The Trade War — Governments seeking supply-chain leverage face limited visibility into their own supply chains, and China's rare earth licensing requirements for multinationals may be partly intended to give Beijing that visibility and allow more precise targeting of future restrictions. Effective measures must impose asymmetric costs, and keeping foreign manufacturers dependent on drip-fed supply is central to Beijing's strategy.
  • Google Unveils Quantum Computing Breakthrough on Willow Chip — Google says its "Quantum Echoes" algorithm, run on its Willow quantum chip and detailed in a paper in Nature, is verifiable on other quantum computers and ran 13,000x faster than the world's best classical supercomputer. Google says the advance points to useful quantum applications in medicine and materials science within five years.
  • IBM Has a Roadmap to a ‘Fault-Tolerant’ Quantum Computer by 2029 — IBM has laid out a roadmap for building a fault-tolerant quantum computer by 2029, citing advances in reducing errors in quantum bits and a technique for identifying and correcting errors in real time using conventional computing. Amazon and Google are also pursuing quantum error correction with dedicated chips.

AI Summary. China’s youth unemployment rate has eased slightly for four consecutive months, though competition for jobs remains intense amid deflationary pressures and a growing mismatch between workers’ skills and available vacancies. The rate had reached 18.9% after a record 12.2m university students graduated, the highest level since students were excluded from the data.

Kandy Wong and Alice Li South China Morning Post
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China’s youth unemployment (16–24) continued to decline from its recent peak in August of 18.9%, falling to 16.5% in December. The unemployment rate for workers 25–29 also fell to 6.9%.

Is China's youth unemployment easing despite intense job competition?

Core argument: China's youth unemployment rate fell slightly in December for the fourth consecutive month, easing from August's 18.9%, the highest level since students were excluded from the data in December 2023.

China’s youth unemployment rate fell slightly in December for the fourth consecutive month, though competition for jobs remains intense as policymakers confront deflationary pressures and a labour market marked by a growing mismatch between skills and vacancies. That figure has eased since August after a record 12.2 million university students graduated over the summer, pushing the jobless rate to 18.9% – the highest level since students were excluded from the data in December 2023. In June that year, youth unemployment had hit a headline-grabbing 21.3%.

Takeaways by Macro Roundup® AI

  1. China's youth unemployment rate fell slightly in December for the fourth consecutive month, easing from August's 18.9%, the highest level since students were excluded from the data in December 2023.

Related Articles:

  • The True Cost of China’s Falling Prices — Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.
  • Macro Outlook 2026: Sturdy Growth, Stagnant Jobs, Stable Prices — China's growth is forecast at 4.8%, above the 4.5% consensus, with robust manufacturing offset by a housing drag on output estimated at about 1.5 percentage points as property sales run 60% below peak. Strong manufacturing and weak domestic demand are projected to lift China's current account surplus toward 1% of global output.
  • 14-Hour Shifts and $1 a Delivery—but China’s Army of Gig Workers Keeps Growing — Self-employed workers make up about 30% of China's nonagricultural workforce, up from 20% in 2013, while the number of ride-hailing drivers tripled to 7.5 million over four years even as rides grew about 60%. The influx of workers into gig work is putting downward pressure on pay.

Wednesday, January 28, 2026

AI Summary. Laffer curves estimated with a realistic tax base are flatter than those using simplified broad or narrow bases, implying smaller revenue gains from raising top tax rates and a lower revenue-maximizing top rate. The authors estimate federal individual income tax revenue peaks at a 47% top rate, yielding only 1.3% more revenue, about 0.1% of GDP.

Rachel Moore, Brandon Pecoraro and David Splinter Joint Committee on Taxation
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JCT calculations suggest that properly constructed individual income tax Laffer curves are flat over wide ranges. Modeling shifting across business types and interactions btw various taxes under 2022 law, they find revenue is ~ constant for top rates btw 37% and 55%.

How much revenue would raising top tax rates actually generate?

Core argument: A Laffer curve estimated with a tax calculator and the true tax base peaks at a top rate of 47%, yielding only 1.3% more federal individual income tax revenue, about 0.1% of GDP.

Laffer curves estimated with more realistic taxes are flatter, suggesting less potential revenue gains from top rate increases and a lower revenue-maximizing top rate. Standard simplifications miss meaningful behavioral margins such as shifting across tax bases and sectors. Interactions between federal individual income taxes and other taxes produce even flatter Laffer curves and smaller revenue gains from higher top rates. Panel A of Figure 2 shows how federal individual income tax revenues change as the top tax rate varies along the x-axis. With a broad base, total income enters the tax function as a single base, applying the top rate to all income even though much of it qualifies for lower preferential tax rates. With a narrow base, only wage income enters the tax function, which fails to apply the top tax rate to any capital income. The true tax base lies between the narrow and the broad base. The Laffer curve estimated using the tax calculator and true base reaches a more modest peak (only 1.3% more tax revenue) at a top tax rate of 47%. Notably, this additional federal income tax revenue is only about 0.1% of GDP. Relative to both the narrow and broad bases, the true base implies smaller potential revenue gains and a lower revenue-maximizing top tax rate.

Takeaways by Macro Roundup® AI

  1. A Laffer curve estimated with a tax calculator and the true tax base peaks at a top rate of 47%, yielding only 1.3% more federal individual income tax revenue, about 0.1% of GDP.
  2. The true tax base lies between a narrow base covering only wage income and a broad base applying the top rate to all income, and it implies smaller potential revenue gains and a lower revenue-maximizing top rate than either.
  3. Standard simplifications omit behavioral margins such as shifting across tax bases and sectors, and interactions between federal individual income taxes and other taxes produce flatter Laffer curves with smaller revenue gains from higher top rates.

Related Articles:

  • Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications — Swedish data show that when a wealth-taxed entrepreneur emigrates, employment at their businesses falls 33%, value-added 34%, tax payments 50%, and investment 21%, but 60% of closed firms are absorbed by other domestic companies. The authors estimate aggregate effects on employment and investment are small.
  • California’s Billionaire Tax Plan Will Backfire — California now draws more than 60% of its revenue from personal income taxes, compared with about 11% in the early 1950s when sales and use taxes supplied nearly 60%. The state's top 1% of taxpayers — roughly 170,000 filers — paid about 40% of personal income tax revenue, payments that depend heavily on unpredictable capital gains.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. At age 30, 31% of Millennials still live with parents or roommates versus 19% of Boomers, and only 61% of Millennial household heads are married versus 77% of Boomers; the analysis attributes most of the 18-percentage-point home ownership gap (25% versus 43%) to these two differences. Among married household heads, the ownership gap narrows to 8 points.

Aziz Sunderji Home Economics
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60% of millennials who are married and living apart from their parents at age 30 own a home, compared to 68% of comparable baby boomers. At 30, 42% of millennials are married, versus 64% of boomers.

Do delayed household formation and marriage explain lower young-adult homeownership?

Core argument: Home ownership at age 30 is 25% for Millennials versus 43% for Boomers, an 18-point gap the analysis attributes largely to differences in household formation and marriage.

The diagram traces the path from birth to living arrangement at age 30 for Millennials and Boomers. It reveals two junctures where the generations diverged. First, household formation: 31% of Millennials at age 30 still live with parents or roommates, compared to just 19% of Boomers at the same age—a 12-percentage-point gap that immediately disqualifies Millennials from the ownership track. Second, marriage: among those who do form households, only 61% of Millennials are married by age 30, versus 77% of Boomers. These two factors—not leaving the nest and not marrying, at least by age 30—account for the bulk of the 18-point ownership gap (43% for Boomers vs. 25% for Millennials). Part of this comes down to shifting preferences and values, but stretched affordability is also an important driver. Strikingly, conditional on being a married household head, ownership rates are much closer: 68% of married Boomer heads owned at 30, compared to 60% of Millennials—an 8-point gap, far smaller than the headline 18-point difference.

Takeaways by Macro Roundup® AI

  1. Home ownership at age 30 is 25% for Millennials versus 43% for Boomers, an 18-point gap the analysis attributes largely to differences in household formation and marriage.
  2. Among Millennials at age 30, 31% still live with parents or roommates, compared with 19% of Boomers, a 12-point gap that excludes them from the ownership track.
  3. Among married household heads, ownership at age 30 is 60% for Millennials versus 68% for Boomers, an 8-point gap far smaller than the headline 18-point difference.

Related Articles:

AI Summary. Shortages of the most fuel-efficient aircraft engines have sent their market values soaring, and industry experts and executives expect prices to stay elevated even as manufacturers raise output and expand maintenance capacity. An Irish aircraft lessor reports two new engines sold separately as spares can equal as much as 80% of a new plane's value, versus 20-30% two decades ago.

Sylvia Pfeifer and Peter Campbell Financial Times
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Two decades ago, engines accounted for 20–30% of an aircraft’s value. That has risen to as much as 80%, according to a new report by lessor Avolon.

Will aircraft engine prices stay elevated despite rising production?

Core argument: Two new aircraft engines sold separately as spares can account for as much as 80% of a new aircraft's value, compared with 20–30% two decades ago, according to a report by Irish lessor Avolon.

Aircraft engine values have soared and are likely to remain elevated for the foreseeable future even as manufacturers boost output and expand critical maintenance capacity, warn industry experts and executives. Supply shortages of the industry’s most fuel-efficient aircraft engines have sent their market values soaring. In some cases, if sold separately as spares, two new engines can account for as much as 80% of the value of a new aircraft, according to a report by Irish lessor Avolon. Although engine values have been rising over the past few years, a pair of engines two decades ago would have accounted for 20-30% of an aircraft’s value. Engine constraints have become one of the biggest concerns for the industry as manufacturers have struggled to keep up with booming demand for Airbus and Boeing planes.

Takeaways by Macro Roundup® AI

  1. Two new aircraft engines sold separately as spares can account for as much as 80% of a new aircraft's value, compared with 20–30% two decades ago, according to a report by Irish lessor Avolon.
  2. Shortages of the industry's most fuel-efficient aircraft engines have sent their market values soaring, and industry experts and executives expect values to remain elevated even as manufacturers raise output and expand maintenance capacity.
  3. Engine constraints have become one of the biggest concerns for the aviation industry as manufacturers struggle to keep pace with booming demand for Airbus and Boeing planes.

Related Articles:

  • How Long Can Airbus Keep Its Edge Over Boeing? — Airbus's A320 family of single-aisle jets is poised to overtake Boeing's 737 as the most-delivered commercial aircraft in history, with 12,153 delivered since launch, according to aviation consultants Cirium. After years of a roughly even split, Airbus holds 61% of the single-aisle market by order backlog and 72% by deliveries, while Boeing leads in wide-body aircraft.
  • Boeing Has Started Working on a 737 MAX Replacement — Boeing's aircraft-development programs have struggled, with two fatal 737 MAX crashes leading to a global grounding and delays to new variants, the cancellation of a planned midsize jet, and a 777 upgrade years behind schedule. Rival Airbus has become the world's biggest plane maker by deliveries and order backlog.
  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.

AI Summary. China's broad price gauge, the GDP deflator, has been negative since 2023, indicating weak domestic demand, with profits shrinking across industries from steel and electric vehicles to cosmetics and profit margins among publicly traded mainland firms at their lowest since 2009. Fixed-asset investment in homes, factories and roads fell for the first time on record.

Hannah Miao Wall Street Journal
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Chinese producer prices have been falling since 2023, and profit margins at publicly traded Chinese firms are the lowest since 2009. Due to Xi’s “deep-rooted philosophical objections to Western-style consumerism,” deflation will be hard to address.

Are falling prices squeezing profits and investment across China's economy?

Core argument: China's GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate domestic demand.

[The rate of change in] China’s GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate demand at home. Corporate filings show profits shrinking at companies in a wide range of industries, including steel, concrete, electric vehicles, robotics, condiments and cosmetics. Profit margins among publicly traded companies in China are at their lowest levels since 2009, according to a FactSet index of 5,000 mainland-domiciled firms. Fixed-asset investment—which tracks spending on assets such as homes, factories and roads—fell in 2025 for the first time on record. But involution is also the price to pay for Chinese leader Xi Jinping’s goal of industrial self-reliance and global leadership in advanced technologies, which has largely come at the expense of supporting consumers.

Takeaways by Macro Roundup® AI

  1. China's GDP deflator, a broad price gauge, has been negative since 2023, a sign of inadequate domestic demand.
  2. Profit margins among publicly traded Chinese companies stand at their lowest levels since 2009, according to a FactSet index of 5,000 mainland-domiciled firms, with corporate filings showing shrinking profits in steel, concrete, electric vehicles, robotics, condiments and cosmetics.
  3. China's fixed-asset investment, which tracks spending on assets such as homes, factories and roads, fell in 2025 for the first time on record, while Xi Jinping's goal of industrial self-reliance and leadership in advanced technologies has largely come at the expense of supporting consumers.

Related Articles:

  • US Exceptionalism Versus Chinese Uninvestibility (Part I) — China redirected domestic savings toward de-Westernizing its industrial supply chains through tighter capital controls, suspended stock listings, and concentrated bank lending, which the author argues was deflationary and produced poor investor returns. The author argues that if the US pursues comparable supply-chain separation from China, capital would shift into lower-return activities.
  • China’s Economy: Rightsizing 2025, Looking Ahead to 2026 — The authors argue China's official growth figures are inconsistent with ten consecutive quarters of deflation, estimating that real GDP is around 11% below official levels, with most of the adjustment in investment. That would imply a drop of roughly 9 percentage points in China's share of global investment, helping explain its export surge.
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