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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, February 10, 2026

AI Summary. An analysis merging Labor Department, Homeland Security, and American Community Survey data estimates the average H-1B visa worker earns about 16% less than a comparable US-born worker, implying payroll savings near $100,000 over a six-year visa term. Simulations suggest a $150,000–$200,000 visa fee would barely reduce hiring while raising $10bn–$20bn annually.

George Borjas National Bureau of Economic Research
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Adjusting for worker quality, H1-B holders earn ~16% less than peers (software developers ~26% less). With H1-Bs capped at 85k, excess demand means a $150k fee would have little effect on the number of workers hired, while raising their mean skill level.

How much would a large visa fee reduce skilled foreign hiring?

Core argument: The average H-1B worker earns about 16% less than a US-born worker in the same locality with the same education, age, gender, and occupation, according to data merged from Labor Condition Applications, I-129 petitions, and the American Community Survey.

The analysis merged data from three distinct sources: the Labor Condition Application (LCA) filed with DOL for temporary positions to be filled by foreign persons, the I-129 forms filed with DHS petitioning the entry of a specific foreign-born person through the H-1B program, and the American Community Surveys (ACS) that provides the “baseline” sample of native workers. The evidence indicated that the average H-1B worker earns about 16% less than a US-born worker in the same locality and with the same education, age, gender, and occupation. Since these high-skill workers typically earn more than $100,000 annually, the average payroll savings resulting from a single H-1B hire nears $100,000 over the term of the six-year visa term. [Thus] firms might be willing to pay a substantial fee for the “privilege” of hiring such a worker. The simulation of an economic model of the employer’s hiring decision, combined with the excess demand for the foreign workers, revealed that imposing a visa fee between $150,000 and $200,000 may not change the number of H-1B workers hired all that much. The fee, however, will generate revenues totaling between $10 billion and $20 billion annually and change the skill composition of the H-1B workforce, making it more skilled.

Takeaways by Macro Roundup® AI

  1. The average H-1B worker earns about 16% less than a US-born worker in the same locality with the same education, age, gender, and occupation, according to data merged from Labor Condition Applications, I-129 petitions, and the American Community Survey.
  2. Because these high-skill workers typically earn more than $100,000 annually, the average payroll savings from a single H-1B hire approaches $100,000 over the six-year visa term.
  3. A simulation of an employer hiring model, combined with excess demand for foreign workers, indicates a visa fee between $150,000 and $200,000 may change the number of H-1B workers hired little while generating $10 billion to $20 billion annually and making the H-1B workforce more skilled.

Related Articles:

  • The Extreme Shortage of High IQ Workers — Semiconductor manufacturing requires workers of above-average intelligence, with the most demanding roles needing IQs in the top 1 in 1,000 — a pool of about 164,000 people in the US, of whom perhaps 100,000 can be placed in such professions. The author argues this scarcity explains reliance on high-IQ workers abroad and on smarter tools and non-human intelligence.
  • Third-Country Effects of U.S. Immigration Policy — U.S. H-1B visa denial rates rose from about 6% to 16%, and the authors estimate a 10 percentage point rise in denials increases Canadian applications by 30%, roughly one Canadian application per four forgone visas. More exposed Canadian firms increased sales and hired about 0.5 native workers per immigrant.
  • Top Talent, Elite Colleges, and Migration: Evidence from the Indian Institutes of Technology — Among top scorers on India's Joint Entrance Exam for the Indian Institutes of Technology, 62% of the top 100 and 36% of the top 1,000 migrated abroad within eight years, primarily to the U.S. for graduate school. The authors argue elite schools shape migration by signaling ability and providing access to networks.

AI Summary. Global electricity demand is projected to grow faster than the world economy throughout the forecast period, driven by electricity-intensive industries, air conditioning, data centres and continued electrification. US electricity demand is forecast to rise about 2% a year over 2026-2030, more than twice the past decade's rate, with data centres accounting for almost half that growth.

Eren Çam, Marc Casanovas, John Moloney and Matthew Davis International Energy Agency
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Since 2024, global electricity demand has outpaced GDP, which it had previously tracked – a “trend shift” in the relation between the two. IEA forecasts US demand will grow ~2% annually btw 2026 and 2030, twice the 2016–2025 rate.

Is electricity demand growing faster than the global economy?

Core argument: US electricity demand is forecast to rise on average by around 2% over 2026–2030, more than twice the rate observed over 2016–2025, with data centres expected to account for almost half of the projected growth.

A trend shift in the link between electricity demand and economic growth is taking place on a global scale, amid strong demand increases from electricity-intensive industries, air conditioning (AC), data centres and continued electrification of end-use sectors. Over the past three decades, global electricity consumption has only grown significantly faster than the world economy during periods associated with economic shocks, such as the aftermath of the 2000-2001 recession, the 2008-2009 financial crisis or during 2020 amid the pandemic. However, 2024 marked the first normal year when electricity demand grew much more rapidly than the economy. Although this trend saw a slight reversal in 2025 amid weather impacts, electricity demand growth is projected to eclipse the pace of GDP expansion throughout our forecast period. For the 2026-2030 period, US electricity demand is forecast to rise on average by around 2%, more than twice the rate observed over the past decade (2016-2025). Data centres’ electricity consumption is expected to account for almost half of the projected growth. Demand growth in the buildings sector, excluding data centres, will also remain significant. The industrial sector – including new industries with large loads such as semiconductor production and battery manufacturing – will be another major contributor to growth.

Takeaways by Macro Roundup® AI

  1. US electricity demand is forecast to rise on average by around 2% over 2026–2030, more than twice the rate observed over 2016–2025, with data centres expected to account for almost half of the projected growth.
  2. Global electricity demand growth is projected to exceed the pace of GDP expansion throughout the forecast period, amid strong demand from electricity-intensive industries, air conditioning, data centres and continued electrification of end-use sectors.
  3. 2024 marked the first normal year in which global electricity consumption grew much more rapidly than the economy, a pattern previously tied to periods of economic shock such as the 2000–2001 recession, the 2008–2009 financial crisis and 2020.

Related Articles:

  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
  • The Real China Model — China generates more electricity annually than the United States and European Union combined, having added capacity equivalent to the United Kingdom's total supply each year. Electricity makes up nearly 30% of China's energy use, versus 22% in the US and 21% globally, and its share is growing about 6% a year.
  • Europe’s Green Energy Rush Slashed Emissions—and Crippled the Economy — Europe has cut carbon emissions 30% from 2005 levels versus 17% in the US, while the shift to renewables has helped push electricity prices higher across much of the continent. Average electricity prices for heavy industry in the European Union are roughly 2x those in the US and 50% above China.

AI Summary. Labor's share of total economic output in the US fell from 58% in 1980 to 51.4%, while profits' share rose from 7% to 11.7%. Contributing factors include weakened union and outsourcing-related bargaining power, a shift toward shorter-lived capital such as computers, software and intellectual property, and automation, with labor's share of factory value added falling from 66% to 45%.

Greg Ip Wall Street Journal
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Btw 1980 and Q3:2025, labor’s share of GDI fell from 58 to 51.4%, while corporate profits rose 4.7pp to 11.7%, which Ip links to the rise of profitable firms that use little labor and “the disconnect between a buoyant economy and pessimistic households.”

Why has labor's share of economic output fallen while profits rose?

Core argument: Labor's share of U.S. gross domestic income fell from 58% in 1980 to 51.4% in the third quarter of last year, while profits' share rose from 7% to 11.7%.

The shift to capital from labor has been under way for more than 40 years. Labor received 58% of the total proceeds of economic output, as measured by gross domestic income (conceptually similar to GDP), in 1980. By the third quarter of last year that had plummeted to 51.4%. Profits’ share, meanwhile, rose from 7% to 11.7%. In the 1980s and 1990s, the demise of unions and the spread of outsourcing sapped workers’ bargaining power. The nature of capital also changed: Businesses spent less on long-lived buildings and factories and more on computer equipment, software and intellectual property that must be replaced every few years. And then there is automation. Its impact showed up first in manufacturing as machines, robots and computers took the place of workers. In 1980, 66% of value added in factories went to labor as wages and benefits, said Pascual Restrepo, a Yale University economist. By the 2000s, that was down to 45%.

Takeaways by Macro Roundup® AI

  1. Labor's share of U.S. gross domestic income fell from 58% in 1980 to 51.4% in the third quarter of last year, while profits' share rose from 7% to 11.7%.
  2. Yale economist Pascual Restrepo says labor's share of value added in U.S. factories fell from 66% in 1980 to 45% by the 2000s, as machines, robots and computers took the place of workers.
  3. The decline of unions and the spread of outsourcing in the 1980s and 1990s sapped workers' bargaining power, while business spending shifted from long-lived buildings and factories toward computer equipment, software and intellectual property that must be replaced every few years.

Related Articles:

  • A Macroeconomic Perspective on Stock Market Valuation Ratios — The authors argue that a decline in labor's share of US corporate value added, combined with weak corporate investment, mechanically raises valuation-to-earnings ratios even without changes in expected returns or growth. They find corporate enterprise value rose alongside an equal-sized increase in free cash flow's share of value added.
  • Superstar Firms Through The Generations — Among the largest US industrial firms, those founded between 1880 and 1920 remain the most represented, while top retailers and wholesalers have averaged 60–70 years old and large services firms cluster around founding dates of 1960–1980. The authors model such a "special generation" as arising from adopting a scalable technology plus learning-by-doing.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.

AI Summary. Alphabet raised almost $32bn of debt across dollar, sterling, and Swiss franc offerings, including an ultra-rare 100-year sterling note, reflecting the funding needs of tech firms building artificial intelligence capacity. Demand was strong, with US tranches drawing more than $100bn of orders and the century bond nearly 10x oversubscribed.

Ronan Martin and Tasos Vossos Bloomberg
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As part of a $32B debt issuance, Alphabet is issuing an “ultra-rare” 100-year sterling bond – “the first sale with such an extreme maturity by a technology firm since the dot-com era,” according to Bloomberg.

How large is investor appetite for tech debt funding AI buildouts?

Core argument: Alphabet is raising almost $32 billion of debt in under 24 hours, following a $20 billion seven-part dollar sale with record-breaking sterling and Swiss franc offerings.

Alphabet is set to raise almost $32 billion in debt in less than 24 hours, showing the enormous funding needs of tech giants competing to build out their artificial intelligence capabilities — and the huge appetite from credit markets to fund them. The Google parent followed Monday’s $20 billion seven-part dollar debt sale with sterling and Swiss franc-denominated offerings which broke records in both markets. The sterling issue includes an ultra-rare 100-year note — the first sale with such an extreme maturity by a technology firm since the dot-com era, according to data compiled by Bloomberg. Demand was high across the deals, with the US tranches getting more than $100 billion of orders, according to people with knowledge of the matter. The sterling century bond has drawn close to ten times orders for the £1 billion ($1.4 billion) on offer. Such a wide range of maturities in different markets meant there was something for investors of all stripes — from asset managers and hedge funds to the pension funds and insurers that favor longer-dated debt.

Takeaways by Macro Roundup® AI

  1. Alphabet is raising almost $32 billion of debt in under 24 hours, following a $20 billion seven-part dollar sale with record-breaking sterling and Swiss franc offerings.
  2. The US tranches of Alphabet's debt sale drew more than $100 billion of orders, and the £1 billion ($1.4 billion) sterling century bond attracted close to ten times the amount on offer, according to people with knowledge of the matter.
  3. Alphabet's sterling issue includes a 100-year note, the first sale with such an extreme maturity by a technology firm since the dot-com era, according to data compiled by Bloomberg.

Related Articles:

  • 2026 Credit Outlook: From Scarcity to Selection—The Return of a Buyer’s Market — Capital spending by Amazon, Meta, Oracle, Alphabet and Microsoft has tripled since 2023, and sell-side forecasts project more than $2.7tn of cumulative outlays through 2029, mostly tied to AI infrastructure. These programs, initially funded largely from internal cash flow, are shifting toward debt, with the companies pricing roughly $90bn of bond deals.
  • Big Tech’s $680bn Buy-Now-Book-Later Problem — Morgan Stanley's accounting team estimates that splitting hyperscaler capital spending into AI and non-AI components, with graphics chips assumed to last up to six years and warehouses 15 years, could quadruple Alphabet's depreciation expense within several years and lift Oracle's from $4bn to $56bn, equal to 28% of expected revenue.
  • Smothering Heights — The four largest cloud computing firms are devoting rising shares of revenue to capital spending and research, with Meta's combined share reaching 70%. Unlike past investment booms, this one has been financed mostly from internal cash flow: 28 direct AI stocks make up 50% of S&P 500 market value but just 5% of its net debt.

AI Summary. Japanese stocks rose while government bond yields eased slightly, leaving Japanese markets positioned for a cyclical breakout with stocks far outperforming bonds. A more assertive Japanese foreign policy and a weak yen — which has drawn Chinese tourists and investors into Japan and made Japanese exporters more competitive — risk friction with China.

John Authers Bloomberg
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Japanese government bond yields have dropped slightly, and the Nikkei has risen ~7% since Takaichi’s decisive victory on Sunday. Authers notes that Sino-Japanese tensions are likely to rise, given Yen weakness and the likely increase in defense spending.

Are rising stocks and a weak yen setting up friction with China?

Core argument: The Nikkei 225 rose 2.8% in Tuesday morning trade after Monday's 3.9% gain, while Japanese government bond yields fell slightly, the combination Takaichi wanted.

The Nikkei 225 gained another 2.8% in Tuesday morning trade, following Monday’s 3.9% gain, while Japanese government bond yields dropped slightly, exactly the combination Takaichi wanted. Japanese markets are now unmistakably positioned for a cyclical breakout, with stocks far outperforming bonds. The difference between Japan and the US over the period of the two countries’ elections is stark. The main problem with a more assertive foreign policy is the effect it could have on China. Yen weakness could also be a critical issue, as it has encouraged Chinese tourists and investors into Japan, causing friction, while also making Japanese exporters far more competitive. It’s hard to see how this can carry on much longer. In both military and economic terms, the neighbors may find it hard to get on.

Takeaways by Macro Roundup® AI

  1. The Nikkei 225 rose 2.8% in Tuesday morning trade after Monday's 3.9% gain, while Japanese government bond yields fell slightly, the combination Takaichi wanted.
  2. Japanese markets are positioned for a cyclical breakout with stocks far outperforming bonds, a stark contrast with the United States over the period of the two countries' elections.
  3. Yen weakness has encouraged Chinese tourists and investors into Japan, causing friction, while making Japanese exporters far more competitive, and a more assertive Japanese foreign policy could affect relations with China.

Related Articles:

  • Is Japan “Normal” Again? — Yields on long-term Japanese government debt have risen to their highest since the 1990s while the yen remains cheap relative to its history. One benign reading is that Japan has exited post-bubble stagnation, with modest inflation and faster wage and income growth aligning with higher interest rates.
  • Japan’s Labor Market Under Demographic Decline: Evolving Dynamics and Macroeconomic Implications — Japan's fertility rate stood at 1.15 in 2024 and its working-age population peaked in 1995, with the total population peaking in 2008. Rising labor force participation among women and people 65 and over has more than offset the shrinking working-age population, but further gains are limited since both rates already rank among the highest internationally.
  • Japanese Births Set To Fall Below Lowest Official Forecasts In 2025 — Demographers estimate Japanese births will fall below 670,000 for the year, short of official projections of 749,000 that had not expected that level until 2041. Annual marriages, which in Japan are closely tied to births, have fallen below 500,000, about half the 1972 peak.

AI Summary. European venture capital investment rose 5% to €66bn, a post-pandemic high, with artificial intelligence deals accounting for more than 35% of all transactions at €23.5bn, up from €17.7bn the prior year. Investment in European defence and related technology start-ups rose 55% to a record $8.7bn.

Ivan Levingston, Sylvia Pfeifer, and George Hammond Financial Times
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Total European venture capital investment rose 5% to €66B in 2025, driven by AI and defense startups.

Are AI and defense start-ups driving European venture capital growth?

Core argument: European venture capital investment rose 5% to €66bn in 2025, a post-pandemic high, according to PitchBook, with gains driven by large deals for the continent's top AI and defence companies.

Total European venture capital investment rose 5% to €66bn in 2025, a post-pandemic high, according to PitchBook. Those gains were driven by big deals for the continent’s top AI and defence companies. Last year, AI-related deals accounted for more than 35% of all European venture capital transactions, worth €23.5bn. That marked an increase from €17.7bn for such deals in 2024. Outside AI, European start-ups focused on defence and related technologies saw investment soar 55% year on year to a record $8.7bn in 2025, according to the Nato Innovation Fund and research group Dealroom.

Takeaways by Macro Roundup® AI

  1. European venture capital investment rose 5% to €66bn in 2025, a post-pandemic high, according to PitchBook, with gains driven by large deals for the continent's top AI and defence companies.
  2. AI-related deals accounted for more than 35% of all European venture capital transactions, worth €23.5bn, up from €17.7bn in 2024.
  3. European start-ups focused on defence and related technologies drew a record $8.7bn in 2025, up 55% year on year, according to the Nato Innovation Fund and research group Dealroom.

Related Articles:

  • Will Higher Defence Spending Boost The European Economy? — Defense spending typically has a fiscal multiplier below one, meaning each euro spent raises GDP by less, so it is not a short-term growth strategy. One estimate holds that extra military spending worth 1% of GDP could lift output up to 2% long term if concentrated on research and development.
  • Why Every Country Needs To Master The Electric Tech Stack — Drones are the foundation of hard power in the early 21st century, so a country unable to produce them domestically is at a disadvantage. As electric motors overtake combustion engines as the core technology that makes machines move, the same supply chains and production processes used for electronics can also produce cars, drones, robots, and appliances.
  • The Intellectual Spoils of War? Defense RD, Productivity and International Spillovers — The authors estimate that a 10% increase in government-financed R&D, largely defense, is associated with a 4.3% rise in privately funded R&D across OECD countries, indicating "crowding in" rather than "crowding out." They also find international spillovers raise private R&D abroad, though the overall effect on US productivity growth is modest.

Wednesday, February 11, 2026

AI Summary. Investment in artificial intelligence infrastructure has reached a scale comparable to some of the largest investment booms in U.S. history, with firms issuing historically high growth forecasts. Among U.S. public companies with $2–5bn in starting sales from 1950 to 2024, none sustained the roughly 108% five-year annual growth rate implied by OpenAI's revenue projection.

Michael Mauboussin and Dan Callahan Morgan Stanley
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Examining earnings projections by OpenAI and Oracle, Morgan Stanley finds that, if realized, the forecasted pace would be unprecedented. “No public company has grown this fast for five years in the last three-quarters of a century.”

Have any large companies matched the growth rates AI firms forecast?

Core argument: OpenAI's projected revenue of $145 billion in 2029 against $3.7 billion of 2024 sales implies a five-year compound annual growth rate of 108 percent, a pace no U.S. public company has sustained for five years since 1950.

The launch of ChatGPT, a GenAI technology, catalyzed a wave of investment in AI infrastructure on scale with some of the largest investment booms in U.S. history. As a result, some firms are offering growth forecasts that are historically very high. How should investors assess these projections? One sensible approach is to start with an initial belief [Bayes’ “prior”] and update that belief as new results appear. Base rates, the results for a specific reference class, are a sensible start for initial beliefs. In the fall of 2025, OpenAI projected revenue of $145 billion in 2029. The company's sales in 2024 were $3.7 billion. That reflects a 5-year compound annual growth rate of 108 percent. To assess the plausibility of this forecast, we can start with an initial belief based on what companies with $2-5 billion of starting sales have actually done. Exhibit 3 shows the results, based on a sample of nearly 18,900 firm period observations for U.S. public companies from 1950 to 2024. The data reveal that no public company has grown this fast for five years in the last three-quarters of a century. [A similar comparison of forecasts to base rates] suggests that Oracle Cloud [likewise] has a low probability of meeting [its] five-year revenue projections.

Takeaways by Macro Roundup® AI

  1. OpenAI's projected revenue of $145 billion in 2029 against $3.7 billion of 2024 sales implies a five-year compound annual growth rate of 108 percent, a pace no U.S. public company has sustained for five years since 1950.
  2. The base-rate comparison draws on nearly 18,900 firm-period observations for U.S. public companies from 1950 to 2024, focusing on firms with starting sales of $2-5 billion.
  3. Comparing forecasts to base rates suggests Oracle Cloud has a low probability of meeting its five-year revenue projections.

Related Articles:

  • Chart of the Day: AI Capex, From Bonanza to Burden — Stock price reactions to large artificial intelligence capital spending announcements have shifted from rewarding to penalizing companies, with the valuation multiple markets assign to such spending collapsing and likely turning negative. Technology companies once valued for low debt and low capital intensity are now among the leaders in both.
  • Claude Code is the Inflection Point — Claude Code authors 4% of public GitHub commits, and the authors project it will reach 20%+ of daily commits by the end of 2026 and drive revenue growth that lets Anthropic outgrow OpenAI. They argue falling costs and rising quality of AI tokens have inverted the coder-tool relationship.
  • Surviving the AI Capex Boom — Capital spending by the largest US technology companies has risen from 4% to 15% of revenue since 2012, approaching the capital intensity of utilities, with Meta, Microsoft, and Alphabet each set to spend 21–35% of revenue. The authors argue this shift toward asset-heavy models is associated with inferior returns.

AI Summary. A meta-study of 79 causal estimates finds an average 8.2% earnings gain per year of education, matching earlier work, but also finds evidence of publication bias favoring statistically significant and positive estimates. Correcting for these biases implies an average causal return in the 0%–3% range.

Gregory Clark and Christian Alexander Abildgaard Nielsen Kyklos
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Clark and Nielsen replicate the ~8% estimates of the return to education obtained by standard methods, but find evidence of selection biases in favor of high estimated returns. After correcting for these biases, they calculate returns on the order of 3%.

Do publication biases inflate estimated earnings returns to education?

Core argument: A meta-study of 79 causal estimates of education's effect on earnings, drawn from school-leaving age mandates and child labor bans, reports an 8.2% earnings gain per year of education, similar to the earlier Ashenfelter et al. study.

In this meta-study of 79 estimates of the causal effects of education on earnings (derived from increases of the mandated school-leaving age or legislation banning child labor under certain ages), we report a similar effect to [the classic] earlier study (Ashenfelter, et al): an 8.2% gain in earnings for each year of education. We also find clear evidence of significant publication biases. Studies passing the filter of publication were more likely to have coefficients statistically significantly greater than 0, and we observe strong evidence that studies with returns estimated at less than 0 were more difficult to publish. There is strong suggestive evidence of the first publication bias in the data. Figure 6 shows that the average estimated return rises substantially where the standard error is larger. This suggests a greater likelihood of an estimate being published when it was statistically significantly different from 0. If all estimates were published independent of the estimated return, we would not expect there to be such a gradient. Correcting the first publication bias by looking at the average return on the studies with the lowest standard errors would suggest an average causal return to education of no more than 3%, compared to the reported 8.2%. Independent of this, correcting for the omission of returns less than 0 implies an overall causal return to education only in the 0%–3% range.

Takeaways by Macro Roundup® AI

  1. A meta-study of 79 causal estimates of education's effect on earnings, drawn from school-leaving age mandates and child labor bans, reports an 8.2% earnings gain per year of education, similar to the earlier Ashenfelter et al. study.
  2. Average estimated returns to education rise substantially where standard errors are larger, which suggests estimates were more likely to be published when statistically significantly different from 0.
  3. Correcting for publication bias by using the studies with the lowest standard errors would suggest an average causal return to education of no more than 3%, while correcting for omitted negative estimates implies a 0%–3% range.

Related Articles:

  • 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.
  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • Military Officer Quality in the All-Volunteer Force — The authors find a steady decline in U.S. Marine Corps officers' General Classification Test scores, which is statistically associated with the expansion of college attendance and explains 96% of the measured change. They also find a positive association between African American officers and mean test scores, arguing affirmative action has not lowered officer quality.

AI Summary. The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.

Devrim Demirel, Daniel Fried, Jaeger Nelson, and John Seliski Congressional Budget Office
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CBO projects a deficit of 5.8% of GDP in 2026, unchanged from 2025. Outlays, at 23.3% of GDP, will exceed their 50-year mean by 2.1pp; revenue of 17.5% is just 0.2pp above its long-term mean.

How large will federal deficits and debt grow over the decade?

Core argument: CBO projects the federal deficit will rise from $1.9 trillion in fiscal year 2026 to $3.1 trillion in 2036, equal to 5.8% of GDP growing to 6.7%, compared with the 3.8% average of the past 50 years.

In CBO’s projections, the federal budget deficit in fiscal year 2026 is $1.9 trillion and grows to $3.1 trillion by 2036. Relative to the size of the economy, the deficit is 5.8% of gross domestic product (GDP) in 2026 and grows to 6.7% in 2036, which is greater than the 3.8% deficits averaged over the past 50 years. Rising net interest costs drive much of that increase. The primary deficit, which excludes those net interest costs, totals 2.6% of GDP this year and stays below that level through 2036, when it totals 2.1%. From 2026 to 2036, large and growing deficits cause debt to increase. Federal debt held by the public rises from 101% of GDP this year to 120 percent in 2036, surpassing its previous high of 106% of GDP in 1946.

Takeaways by Macro Roundup® AI

  1. CBO projects the federal deficit will rise from $1.9 trillion in fiscal year 2026 to $3.1 trillion in 2036, equal to 5.8% of GDP growing to 6.7%, compared with the 3.8% average of the past 50 years.
  2. CBO attributes much of the projected deficit increase to rising net interest costs; the primary deficit excluding those costs is 2.6% of GDP in 2026 and stays below that level through 2036, when it totals 2.1%.
  3. CBO projects federal debt held by the public will rise from 101% of GDP in 2026 to 120% in 2036, surpassing the previous high of 106% of GDP in 1946.

Related Articles:

  • Are Government Bonds Safe in Times of War and Pandemic? — Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
  • 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.
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AI Summary. Switzerland will vote on a proposal to cap its population at 10mn, a limit that could jeopardize agreements with the European Union and restrict companies' access to skilled foreign workers. The population stands at 9.1mn, foreign residents make up 27% of the total, and the population has grown about 25% since 2000.

Mercedes Ruehl Financial Times
Date Posted:

Switzerland will hold a vote on a proposal that would cap the country’s population at 10mm people. 27% of the country’s 9.1mm people are foreign residents and the country has grown 25% since 2000, a rate “much higher than most neighboring countries.”

Should a country cap its population to limit immigration?

Core argument: Switzerland will vote on a proposal to cap its population at 10mn, against a current 9.1mn, a measure that could threaten key agreements with the EU and limit companies' access to skilled foreign workers.

Switzerland will hold a vote on a radical proposal to cap the country’s population at 10mn people, a move that could threaten crucial agreements with the EU and limit companies’ access to skilled foreign workers. The country’s current population is 9.1mn people and Switzerland has a high level of immigration, as people are drawn by its high wages and quality of life. It has one of the largest proportions of foreign residents in Europe, at 27% according to official figures, and its population has grown some 25% since 2000, much higher than most neighbouring countries.

Takeaways by Macro Roundup® AI

  1. Switzerland will vote on a proposal to cap its population at 10mn, against a current 9.1mn, a measure that could threaten key agreements with the EU and limit companies' access to skilled foreign workers.
  2. Foreign residents make up 27% of Switzerland's population according to official figures, one of the largest proportions in Europe, with people drawn by high wages and quality of life.
  3. Switzerland's population has grown some 25% since 2000, much higher than most neighbouring countries.

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