Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


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.
  • Larry Summers and Bob Rubin Join Our CIOs to Discuss the Surprising Economic Cycle — Adopting the Simpson-Bowles fiscal consolidation when interest rates were at zero would have risked excessive disinflation, since long rates had no room to fall to provide an offsetting expansionary impulse. After the large run-up in debt and rise in real interest rates, the developing fiscal situation risks inflationary pressure, Treasury market disruption, or crowding out of private investment.

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.

Related Articles:

  • Has Europe Learnt To Manage Migration? — Irregular migrant arrivals to the European Union recorded by its border agency have fallen about 25% over 11 months and have declined since a peak of 380,000, while new asylum applications dropped roughly 26% over nine months as fewer Syrians sought protection after the Assad regime's fall.
  • Africa Needs 1 Billion Jobs by the End of the Century. Where Will It Find Them? — Africa's population, now about 1.5bn, is projected to reach 4bn by 2100, with sub-Saharan Africa approaching 3.5bn and Nigeria's working-age population forecast to exceed 320m. Between 2005 and 2020, Congo, Nigeria, Ethiopia and other large states averaged only one job created for every two entrants to the working-age population.
  • Changing Sub-Saharan Africa’s Growth Trajectory — Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.

Thursday, February 12, 2026

AI Summary. Labor Department revisions lowered previously estimated job gains for the past two calendar years, cutting the combined net change in construction, manufacturing, and retail by 115,000 jobs. Healthcare added about 437,000 jobs and social assistance about 321,000 over 12 months, while all other private-sector jobs combined shrank.

Matt Grossman, Danny Dougherty, and Justin Lahart Wall Street Journal
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Large downward revisions in the latest jobs report imply that apart from healthcare and social assistance, there has been essentially no net job growth since January 2024. Previous tallies for construction, manufacturing, and retail in 2025 fell by 115,000.

Is healthcare hiring the only source of private-sector job growth?

Core argument: U.S. healthcare added about 437,000 jobs in January from a year earlier and the allied social-assistance sector, which includes home health aides, added about 321,000, while all other private-sector jobs combined shrank over the past 12 months.

The Labor Department’s broad revisions lowered previous estimates of how many jobs the economy added in the past two calendar years, spanning the end of Joe Biden’s term and President Trump’s first year back in office. The revisions took an especially big bite out of previous tallies for construction, manufacturing, and retail jobs in 2025. Compared with prior numbers, the net change in those sectors last year dropped by a combined 115,000 jobs. Hiring in the healthcare sector is the big story of the U.S. labor market. The industry added about 437,000 jobs in January from a year earlier, while the closely allied social-assistance sector—which includes jobs such as home health aides—added about 321,000. These roles buoyed the job market over the past 12 months on their own; all other private-sector jobs combined have shrunk. Beyond the private sector, there were big losses in government jobs following Trump’s federal-workforce cuts.

Takeaways by Macro Roundup® AI

  1. U.S. healthcare added about 437,000 jobs in January from a year earlier and the allied social-assistance sector, which includes home health aides, added about 321,000, while all other private-sector jobs combined shrank over the past 12 months.
  2. The Labor Department's revisions lowered prior job-gain estimates for the past two calendar years, cutting the combined 2025 net change in construction, manufacturing, and retail by 115,000 jobs.
  3. Government employment posted large losses following President Trump's federal-workforce cuts.

Related Articles:

  • U.S. Wages Still Rising Briskly, Employment Holding Up, and Inflation Still Sticky (Probably) — The U.S. job market looks no less healthy than a few months earlier: the rise in unemployment to 4.56% has coincided with more people actively looking for work, while the share of Americans aged 25-54 with a job held near 80.6%. Wages rising about 4% a year can explain inflation running about 1 percentage point above pre-pandemic rates.
  • America is Losing Blue Collar Jobs — US industrial employment has fallen by 65,000 over the past year and is down 123,000 from its early-2025 peak, with manufacturing and transportation accounting for most losses and construction job gains slowing to 52,000 from 191,000 the prior year. The author attributes the decline to tariffs raising input costs, immigration enforcement hitting construction, and cuts to industrial policy subsidies.
  • Our Favorite Charts of 2025 — Wage growth is slowing more for lower-paid workers than for higher earners, limiting those households' ability to keep spending, while hiring is concentrated in select industries such as healthcare and among larger firms as small private firms shed workers. Layoffs remain low, but the number of workers unemployed for 27 weeks or more has only rarely been higher.

AI Summary. Recent US job gains have been concentrated in healthcare and social assistance, and employment outside government, healthcare and social assistance has been mostly negative since mid-2024. Cyclical sectors have improved lately, with construction adding jobs in three of the past four months, temporary help rising for three straight months, and manufacturing turning positive.

Robert Armstrong Financial Times
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Of the 130,000 jobs created in January, 123,000 were in healthcare and social assistance. However, Robert Armstrong notes a slight uptick in manufacturing employment, which has been a drag since the start of 2024, as well as in construction and other cyclical sectors.

Are cyclical sectors improving as job gains concentrate in healthcare?

Core argument: Of the 130,000 jobs created in January, 123,000 were in healthcare and social assistance, and employment outside government, healthcare and social assistance has been mostly underwater since mid-2024.

In January: of the 130,000 jobs created, 123,000 were in healthcare and social assistance. But while the job market outside government, healthcare and social assistance has been mostly underwater since mid-2024, the trend since October has been encouraging. What is driving the improvement in cyclical-sector employment? Construction added 30,000 jobs in January and has been in positive territory in three of the past four months. Temporary help, which should be a good indicator of cyclical demand, has added jobs for three straight months, something it hasn’t done since 2022. And the manufacturing sector, which has been a significant drag on employment since the start of 2024, has broken into positive territory.

Takeaways by Macro Roundup® AI

  1. Of the 130,000 jobs created in January, 123,000 were in healthcare and social assistance, and employment outside government, healthcare and social assistance has been mostly underwater since mid-2024.
  2. Construction added 30,000 jobs in January and has been in positive territory in three of the past four months, while manufacturing, a drag on employment since the start of 2024, has turned positive.
  3. Temporary help employment, which should indicate cyclical demand, has added jobs for three straight months, a streak it had not achieved since 2022.

Related Articles:

  • Jobless Growth — Labor demand growth may be too weak to keep pace with even modest labor supply growth: the labor market is somewhat weaker than before the pandemic, job growth has turned negative outside healthcare, and firms are focused on using AI to cut labor costs. Economists estimate most employment losses in routine manual occupations since the 1970s occurred during recessions.
  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.
  • The ‘No Hire’ Economy — US blue-collar employment shrank by more than 145k over the past year, with warehouse jobs down over 50k and construction job growth flat, while tech employment fell more than 19k. Unemployment rose 2.9 percentage points for teenagers and 1.6 points for young college graduates, versus 0.2 points for workers over 25.

AI Summary. Higher electricity demand from artificial intelligence is estimated to exert a 0.1 percentage point drag on GDP growth over two years, as weaker consumer spending is partly offset by higher utility capital spending. The present value of those GDP losses amounts to less than 3% of estimated AI-induced GDP growth.

Manuel Abecasis and Hongcen Wei Goldman Sachs
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Goldman forecasts that higher electricity demand and prices will exert a net .1pp drag on 2026–2027 GDP growth, as lower consumption is partly offset by higher utility capex.

How much does AI's electricity demand weigh on GDP growth?

Core argument: Higher electricity demand is estimated to exert a 0.1pp drag on GDP growth in 2026–2027, as lower consumer spending is partially offset by higher utility capital expenditure.

We aggregate our consumer spending and capex impulses to get an overall impact of higher electricity demand on growth. Our estimates suggest that higher electricity demand will exert a 0.1pp drag on GDP growth in 2026-2027, as lower consumption is partially offset by higher utility capex. The present value of the GDP losses from the AI boost to electricity prices in our forecast amounts to less than 3% of our baseline estimates of AI-induced GDP growth.

Takeaways by Macro Roundup® AI

  1. Higher electricity demand is estimated to exert a 0.1pp drag on GDP growth in 2026–2027, as lower consumer spending is partially offset by higher utility capital expenditure.
  2. The present value of GDP losses from the AI-driven boost to electricity prices amounts to less than 3% of baseline estimates of AI-induced GDP growth.

Related Articles:

  • Electricity 2026 — 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.
  • 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.

AI Summary. Across countries, greater use of industrial policies is associated with larger increases (or smaller declines) in manufacturing employment shares (correlation 0.52) and faster total factor productivity growth (0.48), with East-Asian economies prominent in driving these relationships. The association with export growth is weaker (0.30), and no relationship appears with current account balances as a share of GDP.

Ambrogio Cesa-Bianchi, Andrea Ferrero, Luca Fornar, and Martin Wolf Bank of England
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Cesa-Bianchi et al show that countries (primarily in East Asia) that make more intensive use of industrial policies have had more rapid growth in manufacturing employment, total factor productivity, and exports, but not larger trade surpluses.

Do industrial policies correlate with manufacturing employment and productivity growth?

Core argument: Greater use of industrial policies correlates 0.52 with rises (or smaller drops) in manufacturing employment shares across countries, and 0.48 with total factor productivity growth, both highly statistically significant.

Figure 5 [see image gallery] reports scatter plots together with correlation coefficients (ρ) and associated t-statistics. The data reveal strong and interesting correlations. The left panel shows that countries with higher use of industrial policies experienced larger rises (or smaller drops) in manufacturing employment shares. The correlation is 0.52 and highly statistically significant. The right panel shows that an analogous result applies to TFP growth, with a similar correlation (0.48) and high statistical significance. As one would expect, East-Asian countries play an important role in driving these correlations. This conforms with the popular view that East-Asian countries have adopted a strategy of outward-oriented growth, characterized by policies that promote tradable sectors. Figure 6 shows the relationship between industrial policies and export growth (left panel) and the current account to GDP ratio (right panel), both averaged over the 2002- 2019 period. The results show a positive relation between industrial policies and exports, though with a smaller coefficient (0.30) and lower statistical significance than for TFP or manufacturing employment shares. Industrial policy does not appear to be related to current account to GDP ratio in the raw cross-country data.

Takeaways by Macro Roundup® AI

  1. Greater use of industrial policies correlates 0.52 with rises (or smaller drops) in manufacturing employment shares across countries, and 0.48 with total factor productivity growth, both highly statistically significant.
  2. Industrial policy use is positively related to export growth averaged over 2002–2019, with a smaller correlation of 0.30 and lower statistical significance than for TFP growth or manufacturing employment shares.
  3. Industrial policy shows no relationship with the current account to GDP ratio in the raw cross-country data, while East-Asian countries play an important role in driving the manufacturing employment and TFP correlations.

Related Articles:

  • The Dangerous Triumph Of Neo-Mercantilism — Neo-mercantilism is thriving in both China, which pairs infant-industry promotion with large trade surpluses, and in a United States focused on external deficits and protecting domestic markets. The author argues this will likely fracture the world economy, and that a new multilateral treaty could include a mechanism to combat large structural trade surpluses.
  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
  • Europe Has No Choice But To Intervene On Trade — Manufacturing competitiveness is argued to stem largely from lower labor costs relative to productivity, so policies that raise the household share of income weaken competitiveness while countries that suppress wages gain at trade partners' expense. The author argues Europe must therefore intervene in its external accounts to offset foreign trade intervention rather than cut wages and welfare.