Edward Conard

Top Ten New York Times Bestselling Author

  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a 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
  • “…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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 5, 2026

AI Summary. US labor productivity has grown at an average pace of 2.8% since the start of 2023, more than double the average rate for the decade through 2019. Economists caution that quarterly productivity figures are volatile and single readings carry limited information.

Enda Curran Bloomberg
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American labor productivity has grown at an average pace of 2.8% since the start of 2023, twice the 2009–2019 rate.

Has labor productivity growth doubled its pre-pandemic pace?

Core argument: U.S. labor productivity rose 2.8% in the fourth quarter of 2025 and has grown at an average 2.8% pace since the start of 2023, more than double the average for the decade through 2019.

Labor productivity rose 2.8% [in Q4 2025]. Economists typically don’t read too much into one quarter, since the numbers tend to jump around. Still, the trend has been ticking up. After big swings in the pandemic period, productivity has grown at an average pace of 2.8% since the start of 2023. That’s more than double the average for the decade through 2019.

Takeaways by Macro Roundup® AI

  1. U.S. labor productivity rose 2.8% in the fourth quarter of 2025 and has grown at an average 2.8% pace since the start of 2023, more than double the average for the decade through 2019.
  2. Economists caution against reading too much into a single quarter of productivity data, since the figures tend to jump around, though the trend has been ticking up.

Related Articles:

  • Economic Growth Slowed in Fourth Quarter, Hurt by Government Shutdown — U.S. gross domestic product rose at a 1.4% inflation-adjusted annual rate in the fourth quarter, below the 2.5% economists surveyed expected, weighed down by a record-long government shutdown and slower consumer spending. Full-year growth was 2.2%, down from 2.4% the prior year and the weakest since 2022.
  • An AI Productivity Boom? Don’t Count Your (Productivity Data) Chickens — Measured productivity can rise from compositional effects when lower-wage, lower-productivity workers leave the labor force, as happened during Covid and 2009, and immigration policy changes could produce a similar effect. Much of the recent productivity boost appears to come from capital utilization tied to increased investment in AI rather than workers becoming more productive using AI.
  • Waiting for the AI J-Curve — Artificial intelligence has yet to appear in employment, productivity, or inflation data, or in profit margins and earnings expectations outside the largest technology firms. With fierce competition pushing large language model prices toward zero for users, value creation depends on sector-level implementation, and the author argues AI will likely enhance labor in some sectors rather than replace it across all.

AI Summary. The main economic risk to major economies from the war in Iran is that higher energy prices lift inflation and slow growth, with oil near $80/bbl, up 14% since late February. Analysts project oil moderating to $76/bbl and then $65/bbl as the risk premium fades in a structurally oversupplied market.

Joseph Briggs, Megan Peters and Sarah Dong Goldman Sachs
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GS infers from the 14% rise in oil prices to $80 since late February that the Strait of Hormuz will be closed for 5–6 more weeks, with a .02pp rise in prices and .01pp hit to GDP globally. Prolonged closure could raise prices 0.7pp and slow growth 0.4pp.

How does higher oil from Middle East conflict affect global growth?

Core argument: Oil prices have risen roughly 14% since late February to about $80/bbl, which the commodities team estimates incorporates an expectation of an additional 5–6 weeks of a full Strait of Hormuz closure with pipeline redirection.

The main economic risk to most major economies from the war in Iran is that [rising] energy prices boost inflation and slow growth. Oil prices have risen to around $80/bbl, a 14% increase since late February. Our commodities team estimates that this price incorporates an expectation of an additional 5-6 weeks of a full Strait of Hormuz closure with pipeline redirection. Their recent forecast upgrade assumes oil prices rise a bit further before moderating to $76/bbl on average in 2026Q2 and $65/bbl in 2026Q4 on the back of a fading risk premium and normalization in a market that is structurally oversupplied. We see additional downside growth risks from tighter financial conditions. While financial conditions have not systematically tightened in past Middle East conflicts, our global FCI has tightened by 31bp since Friday. If sustained, this tightening would incrementally lower global GDP growth by 0.3pp over the next year. We also see upside inflation risks from potential disruptions to LNG supply and heightened inflation expectation sensitivity.

Takeaways by Macro Roundup® AI

  1. Oil prices have risen roughly 14% since late February to about $80/bbl, which the commodities team estimates incorporates an expectation of an additional 5–6 weeks of a full Strait of Hormuz closure with pipeline redirection.
  2. The commodities team's forecast upgrade assumes oil rises somewhat further before moderating to an average $76/bbl in 2026Q2 and $65/bbl in 2026Q4 as the risk premium fades in a structurally oversupplied market.
  3. The global financial conditions index has tightened by 31bp since Friday, a move that if sustained would incrementally lower global GDP growth by 0.3pp over the next year.

Related Articles:

  • The Risks to Energy Prices From Iran — Tanker traffic through the Strait of Hormuz, which normally carries a fifth of global oil and liquefied natural gas supply, appears significantly disrupted as shippers, producers, and insurers turn cautious. Analysts estimate an $18/bbl risk premium in crude, and project European gas and spot liquefied natural gas could reach about $25/mmBtu if flows halt for a month.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • The Rise Of The Security Premium — Energy security concerns, not environmentalism, are argued to drive the buildout of solar, wind, and nuclear power, since domestic generation avoids chokepoints like Hormuz, the Red Sea, and the Panama Canal. China and India are expected to demand higher strategic stockpiles of energy and other critical commodities, repricing security above efficiency.

AI Summary. Chinese banks, funded by low-cost domestic money amid monetary easing and weak domestic credit demand, are expanding cross-border lending and undercutting global rivals for sought-after Asian borrowers. Bankers at international institutions say they are being priced out of some of these deals.

Bloomberg Staff Bloomberg
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China’s savings glut and “monetary easing to counter slowing growth” are manifesting themselves in credit expansion overseas, as bankers seek higher yields than they can get at home amidst deflationary pressure.

Are Chinese banks undercutting global rivals in cross-border lending?

Core argument: Chinese banks, flush with low-cost funds from Beijing's monetary easing, are reshaping parts of the $9.5 trillion global loan market by extending cheaper credit across borders.

Chinese banks, flush with low-cost funds, are reshaping parts of the global loan market, underscoring how deflationary pressures in the world’s second-largest economy are increasingly influencing competition with international lenders. Much like US and European manufacturers who have long complained about being undercut by cheaper Chinese rivals, bankers at global institutions now say they’re facing the financial equivalent: being priced out of some of Asia’s most sought-after borrowers as Chinese lenders extend cheaper credit across borders. Enabled by Beijing’s monetary easing to counter slowing growth, Chinese banks are expanding overseas lending amid weakening domestic credit demand. That edge may prove even more significant as the Iran crisis threatens to upend global energy markets, raising the likelihood that major central banks will hold off easing interest rates amid mounting uncertainty.

Takeaways by Macro Roundup® AI

  1. Chinese banks, flush with low-cost funds from Beijing's monetary easing, are reshaping parts of the $9.5 trillion global loan market by extending cheaper credit across borders.
  2. Bankers at global institutions say they are being priced out of some of Asia's most sought-after borrowers by Chinese lenders, a financial equivalent of the undercutting US and European manufacturers have long complained about.
  3. Weakening domestic credit demand in China is accompanying an expansion of its banks' overseas lending, an edge that may prove more significant if the Iran crisis leads major central banks to hold off easing interest rates.

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.
  • 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.
  • China’s Trade Surplus, Part I — China's very high investment rates, combined with a shrinking workforce and slowing productivity, produce sharply diminishing returns, making its decades-old high-savings, high-investment growth model unsustainable. The author argues China's leaders resist a pivot toward consumption because of ideology and geopolitical ambition, with the leadership rejecting welfare spending as breeding dependency.

AI Summary. In each year from 1988 to 2025, more US companies left dividends unchanged than changed them, and changes were more often increases than decreases. Stock buybacks have become the dominant way US companies return cash, making up more than 60% of cash returned over the past decade, which the author attributes mainly to their flexibility.

Aswath Damodaran Musings on Markets
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The fraction of cash flowing to shareholders via buybacks rather than dividends rose from ~35% in 1988 to ~75% in 2000, leveling off at ~65% post-GFG. No longer tax-advantaged, buybacks are preferred because they are more reversible, Damodaran argues.

Why have buybacks overtaken dividends as the main cash return?

Core argument: Buybacks accounted for more than 60% of cash returned to shareholders by US companies over the last decade, and have become the dominant approach to returning cash since their systematic use picked up in the 1980s.

In every single year, from 1988 to 2025, the % of companies that pay the same dividends that they did in the previous year outnumbers companies that change dividends, and when dividends are changed, they are more likely to be increased than decreased (Figure 1 in gallery). [Further], in most companies, managers look to peer group dividend policy for guidance on how much, if any, to pay in dividends. Thus, a firm may turn away good investments or borrow much more than it should because it feels the need to sustain dividends. While buying back stock has always been an option available to US companies, its use as a systematic way of returning cash picked up in the 1980s, and in the years since, stock buybacks have become the dominant approach to returning cash for US companies. As you can see [in the above image], in the last decade, more than 60% of cash returned to shareholders took the form of buybacks. The primary reason, in my view, is that buybacks, unlike dividends, are flexible, with companies often reversing buybacks, if macro circumstances change, as was the case in 2008 and 2020. There are other reasons that have been offered for the explosive growth in buybacks, but none of them are as significant. Changes in tax law in the last two decades have reduced, if not eliminated, the tax disadvantages associated with dividends, cutting against [the traditional tax-based argument for preferring buybacks].

Takeaways by Macro Roundup® AI

  1. Buybacks accounted for more than 60% of cash returned to shareholders by US companies over the last decade, and have become the dominant approach to returning cash since their systematic use picked up in the 1980s.
  2. In every year from 1988 to 2025, companies keeping dividends unchanged from the prior year outnumbered those changing them, and changes were more likely to be increases than decreases.
  3. Damodaran attributes the growth in buybacks primarily to their flexibility, citing companies reversing buybacks in 2008 and 2020, while tax law changes over the last two decades reduced or eliminated the tax disadvantages of dividends.

Related Articles:

  • Capital Allocation — Internal financing has been the main source of capital for U.S. corporations, with steady new debt issuance except in recession years, consistent with a stable capital structure. Companies have retired equity on average, and net equity issuance remains negative even after accounting for stock-based compensation.
  • Trump Demands More Defense Spending But Threatens Biggest Contractors — An executive order requires major defense contractors to end stock buybacks and dividends and cap executive pay at $5m a year until they invest more in factories and research, alongside a demand that Congress raise annual defense spending by over 50% to $1.5tn. Whether a president can mandate private capital allocation is unclear.
  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.

AI Summary. Nvidia has halted production of H200 chips intended for the Chinese market, betting that regulatory barriers in both Washington and Beijing will continue to limit sales to China. The company has reallocated manufacturing capacity at Taiwan Semiconductor Manufacturing Company toward its next-generation Vera Rubin hardware.

Zijing Wu Financial Times
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Nvidia has stopped production of chips intended for the Chinese market, suggesting to the FT that, “Nvidia no longer expects significant H200 sales in China in the near term, after months of uncertainty over US export approvals.”

Are regulatory barriers pushing a chipmaker to abandon China-bound production?

Core argument: Nvidia has halted production of chips intended for the Chinese market, betting that regulatory barriers in both Washington and Beijing will continue to limit its sales to China.

Nvidia has stopped production of chips intended for the Chinese market, betting that regulatory barriers in Washington and Beijing will continue to limit sales to China. The US chipmaker has reallocated manufacturing capacity at Taiwan Semiconductor Manufacturing Company away from making H200 chips to its next-generation Vera Rubin hardware, according to two people with knowledge of the matter. Nvidia had heavily lobbied Washington and Beijing to allow sales of its H200 chips in China. After US President Donald Trump indicated in December he would permit sales, Nvidia began stepping up production. The company had expected orders of more than 1mn units from Chinese clients. Its suppliers had been working around the clock to prepare for deliveries initially planned for as early as March.

Takeaways by Macro Roundup® AI

  1. Nvidia has halted production of chips intended for the Chinese market, betting that regulatory barriers in both Washington and Beijing will continue to limit its sales to China.
  2. Nvidia has reallocated manufacturing capacity at Taiwan Semiconductor Manufacturing Company away from H200 chips toward its next-generation Vera Rubin hardware, according to two people with knowledge of the matter.
  3. Nvidia had expected orders of more than 1mn units from Chinese clients after US President Donald Trump indicated in December he would permit sales, with suppliers working around the clock for deliveries initially planned as early as March.

Related Articles:

  • Should the US Sell Hopper Chips to China? — The H200 chip is roughly 6x as powerful as the H20, which requires an export license for China and has been approved only in limited quantities. The authors estimate the US would hold a 21–49x advantage in AI compute produced in a coming year absent chip exports to China, shrinking to between 6.7x and 1.2x with unrestricted H200 exports.
  • Trump’s Nvidia H200 Reprieve Spurred by Huawei’s AI Gains — A US decision to permit Nvidia H200 sales was shaped by an assessment that Huawei competes with Nvidia more closely than acknowledged, with officials finding Huawei's CloudMatrix 384 platform performed as well as Nvidia's most advanced NVL72 system. Officials also concluded Huawei could produce a few million Ascend 910C accelerators annually.
  • China’s DeepSeek Uses Banned Nvidia Chips for AI Model, Report Says — Chinese AI developer DeepSeek used Nvidia Blackwell chips that were smuggled into China through countries where their sale was permitted, according to a report citing unnamed sources. The chips were installed in data centers abroad, then dismantled and shipped to China after clearing inspection by server-equipment companies.

AI Summary. The Defense Department formally notified Anthropic that the company and its AI tools present security threats, applying a supply-chain risk designation normally reserved for firms from foreign adversaries and rarely used against a U.S. company. Anthropic said it would challenge the designation in court.

Amrith Ramkumar Wall Street Journal
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The Defense Department has officially designated Anthropic a supply-chain risk. Anthropic will challenge the designation in court.

Is the Pentagon labeling a U.S. AI firm a supply-chain security risk?

Core argument: The Defense Department formally notified Anthropic that the company and its AI tools present security threats warranting a supply-chain risk designation normally reserved for businesses from foreign adversaries, according to a senior Pentagon official.

The Defense Department on Thursday formally notified Anthropic’s leadership that the company and its AI tools present security threats that require an action normally reserved for businesses from foreign adversaries, a senior Pentagon official said. Anthropic said last week it would challenge the designation in court. It is one of the first times the supply-chain risk designation has been applied to a U.S. company, a move that tech analysts warn could have a chilling effect on other businesses wanting to do business with the government. The supply-chain risk designation can be used very broadly or in a narrowly tailored way. Hegseth’s post last week said any company working with the military can’t do business with Anthropic, a directive that some analysts said goes beyond the Pentagon’s legal authority. Those analysts said the Defense Department could only tell companies not to use Claude specifically in their work with the Pentagon.

Takeaways by Macro Roundup® AI

  1. The Defense Department formally notified Anthropic that the company and its AI tools present security threats warranting a supply-chain risk designation normally reserved for businesses from foreign adversaries, according to a senior Pentagon official.
  2. Anthropic said it would challenge the designation in court, in one of the first instances of the supply-chain risk designation being applied to a U.S. company.
  3. Hegseth's post stated that any company working with the military cannot do business with Anthropic, a directive some analysts said exceeds the Pentagon's legal authority, which they said extends only to barring Claude in Pentagon work.

Related Articles:

  • Clawed — The US Department of War threatened to designate the artificial intelligence company Anthropic as a supply-chain risk after it refused to accept the government's terms on how its technology may be deployed. The author argues this treats a domestic company like a foreign adversary for expressing different views and making its own decisions about the use of its property.
  • Anthropic and Alignment — Designating an AI company a supply-chain risk would be devastating because it depends on cloud hosting from Amazon, Microsoft, and Google, all of which hold US defense contracts, though such authority appears limited to work covered by US government contracts. The author argues governments have incentive to destroy any private firm that dictates terms to their military.
  • The Geopolitics of AI: Decoding the New Global Operating System — The performance gap between the top American and Chinese AI models narrowed from 9.3% to 1.7%, with Chinese firms relying on cheaper open-source models—DeepSeek prices usage 20-40x below OpenAI's ChatGPT. This price advantage could win adoption in developing countries and build dependency on Chinese AI ecosystems.

Friday, March 6, 2026

AI Summary. Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.

OECD Staff Organisation for Economic Co-operation and Development
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Across the OECD last year, $13.5T of governmental debt needed refinancing, 70% ($9.5T) of which was US debt, up from 57% in 2020. The US and Japan were outliers in refinancing requirements relative to GDP.

How high has government borrowing across advanced economies risen?

Core argument: OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.

The gross borrowing requirements of central governments in the OECD area continued the upward trajectory that began in 2023. This followed decreases in 2021 and 2022 after the large spike in issuance in 2020 at the onset of the COVID-19 pandemic. Borrowing increased by 7% in 2025, rising from around USD 16 trillion in 2024 to a record USD 17 trillion, and it is projected to reach around USD 18 trillion in 2026. As a share of GDP, gross borrowing decreased by almost 1 p.p. to 23% in 2025, but it is projected to rise again to 24% in 2026. Annual refinancing requirements reached a record high in nominal terms in 2025, but declined as a share of GDP. [Sustained output growth resulted in the debt stock as a share of GDP in the OECD area remaining stable at 83% in 2025]. A few large issuers account for the majority of refinancing requirements in the OECD area, with the United States and Japan representing close to 80% of the total (Figure 1.2, Panel B). However, while the share accounted for by Japan declined from 16% in 2020 to 7% in 2025, that of the United States increased from 57% to 70%.

Takeaways by Macro Roundup® AI

  1. OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.
  2. Gross borrowing as a share of OECD GDP fell by almost 1 percentage point to 23% in 2025 and is projected to rise to 24% in 2026, while the debt stock remained stable at 83% of GDP amid sustained output growth.
  3. The United States and Japan account for close to 80% of OECD refinancing requirements, with the US share rising from 57% in 2020 to 70% in 2025 as Japan's declined from 16% to 7%.

Related Articles:

  • The Budget and Economic Outlook: 2026 to 2036 — 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.
  • 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.
  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.

AI Summary. Employment rates have declined for young adults both with and without college degrees, with non-degree holders faring marginally worse, and employment growth for young workers of all education levels has lagged that of other workers. Artificial intelligence can replace some lower-skilled jobs, but those jobs are too few to drive youth labor market weakness.

Adam Ozimek and Nathan Goldschlag Agglomerations
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Since the summer of 2023, the employment rate for Americans 22–25 has declined for both college grads and non-college workers, a phenomenon beyond both AI-elimination of routine jobs and replacement of programmers and entry-level college workers.

Is AI behind weak employment for young workers of all education levels?

Core argument: Employment rates have declined for young adults both with and without college degrees, and those lacking degrees have endured marginally worse labor market outcomes.

It turns out that employment rates have declined for young adults both with and without degrees. If anything, those without degrees have actually endured marginally worse labor market outcomes. And similar to the trend observed in labor force participation, growth in the employment rates of young adults of all education levels have lagged behind those of all other workers. Young workers of all education levels are lagging the rest of the labor market. Focusing too much on education rather than age as the main labor market weakness starts us in the wrong direction. So is AI nonetheless to blame for the broad-based weakness in the labor market for young people? It’s true that some lower-skilled jobs can be replaced by AI. Call center workers and data entry jobs are potential examples. But there are not enough of these jobs to really drive the youth labor market. And this explanation certainly does not fit the media narrative focused on AI displacing computer science majors and entry level college graduates. The whodunnit is not about recent college graduates, but about young people of all types.

Takeaways by Macro Roundup® AI

  1. Employment rates have declined for young adults both with and without college degrees, and those lacking degrees have endured marginally worse labor market outcomes.
  2. Employment-rate growth for young adults of all education levels has lagged that of all other workers, mirroring the trend in labor force participation, pointing to age rather than education as the main labor market weakness.
  3. AI can replace some lower-skilled jobs such as call center and data entry work, but those jobs are too few to drive the youth labor market and do not fit the narrative of AI displacing entry-level college graduates.

Related Articles:

  • 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.
  • Tech Has Never Caused a Job Apocalypse. Don’t Bet on It Now — Labor Department data analyzed by researchers show the number of software developers up 5% year over year, a pace largely consistent with the past 23 years, while computer programmers declined slightly in line with a decades-long trend. The median young computer science graduate earned 63% more than the typical young graduate in 2024, up from 47% in 2009.
  • AI Tracker – The GDP Dividend; A Jobs Dilemma — Unemployment in occupations exposed to artificial intelligence rose to 3.8% from 3%, a larger increase than the 0.3 percentage point rise in the national rate, while unemployment in non-exposed occupations edged lower. The rise is concentrated among workers aged 34 and under, whose jobless rate jumped to 5.3% from 3%.

AI Summary. American technology capital spending rose 32% year over year while non-technology spending fell 3%, according to the analysis; in non-US developed markets, technology capital spending rose 9% and non-technology spending was flat. The author argues the global capital spending story is largely a US technology story.

Paul Kedrosky Notes on Complexity
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Kedrosky finds American tech capex rose 32% y/y, while non-tech capex declined 3%. Non-US developed market tech capex increased 9% while non-tech capex was flat.

Is global capital spending growth mainly a US technology story?

Core argument: Kedrosky finds American tech capex rose 32% year over year while US non-tech capex fell 3%.

The ongoing global capex story is largely a US tech one, not a global one. Absent the US, there is no story to tell.

Takeaways by Macro Roundup® AI

  1. Kedrosky finds American tech capex rose 32% year over year while US non-tech capex fell 3%.
  2. In non-US developed markets, Kedrosky finds tech capex rose 9% while non-tech capex was flat.
  3. Kedrosky argues the global capex story is largely a US tech one, with no story to tell absent the United States.

Related Articles:

  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.
  • Rough Notes, Feb 20, 2026: AI Capex in Q4 GDP, Anthropic Revenues, Agentic Domains, etc. — An early estimate puts the floor contribution of artificial intelligence capital spending to fourth-quarter US GDP growth at about 64%, and likely closer to 80% including externalities and multipliers, though the calculation is not adjusted for imports. The author also notes that token price deflation persists and that US-China token price differences are immense and growing.

AI Summary. U.S. electricity net generation reached a record 4.43 terawatt hours, up 2.8% from the prior year's high, contrasting with relatively flat generation from the mid-2000s to the early 2020s. Much of the recent demand growth comes from the commercial sector, which includes data centers, and the industrial sector.

EIA Staff Energy Information Administration
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In 2025, the United States generated 4.43 terawatt hours (TWh) of electricity, up 2.8% from 2024’s record level, and in “contrast with the trend of relatively flat electricity generation between the mid-2000s and early 2020s.”

Is U.S. electricity generation hitting records after years of flat output?

Core argument: U.S. net electricity generation reached a record 4.43 TWh in 2025, up 2.8% from 2024, which had itself been the highest annual total in the Monthly Energy Review dataset dating back to 1949.

U.S. electricity net generation reached a record in 2025 based on data from our Electricity Data Browser. In 2025, the United States generated 4.43 terawatt hours (TWh) of electricity, up 2.8% from 2024 generation, which previously had been the highest annual total in our Monthly Energy Review Data Browser dataset dating back to 1949. This growth contrasts with the trend of relatively flat electricity generation between the mid-2000s and early 2020s. Net generation is related to electricity demand. Much of the recent growth in electricity demand comes from the commercial sector, which includes data centers, and the industrial sector, which includes manufacturing establishments. In 2025, U.S. retail sales of electricity to ultimate customers, which is a key indicator of demand, increased compared with 2024 in all three sectors: residential (by 10%), commercial (by 4%), and industrial (by 1%).

Takeaways by Macro Roundup® AI

  1. U.S. net electricity generation reached a record 4.43 TWh in 2025, up 2.8% from 2024, which had itself been the highest annual total in the Monthly Energy Review dataset dating back to 1949.
  2. U.S. retail electricity sales to ultimate customers, a key indicator of demand, rose in all three sectors in 2025 compared with 2024: residential by 10%, commercial by 4%, and industrial by 1%.
  3. Much of the recent growth in U.S. electricity demand comes from the commercial sector, which includes data centers, and the industrial sector, which includes manufacturing establishments, contrasting with relatively flat generation from the mid-2000s to the early 2020s.

Related Articles:

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AI Summary. Taiwan's economy has grown more than 12% over the past year, its fastest annual pace in nearly 50 years, as AI chip demand lifts net exports and pushes manufacturing to nearly 40% of output. Its trade surplus is flowing into outbound direct investment and foreign lending rather than US bonds.

Joseph Politano Apricitas Economics
Date Posted:

The Taiwanese economy grew more than 12% in 2025 and ~23% since the launch of Chat-GPT in late-2022, driven by demand for chips to power datacenters, with ~80% of GDP growth due to net exports and manufacturing growing to ~40% of the economy.

How is AI chip demand reshaping Taiwan's growth and foreign investment?

Core argument: Taiwan's GDP rose at a 23.6% annualized rate in 2025:Q4, the fastest pace since its initial recovery from the 2008 recession, as demand for AI chips from TSMC buoyed the economy.

Taiwanese GDP rose at a 23.6% annualized rate in the last quarter of 2025:Q4, the fastest pace since the nation’s initial recovery from the 2008 recession, as demand for AI chips from Taiwan Semiconductor Manufacturing Company (TSMC) buoys the economy. Overall, the Taiwanese economy has grown more than 12% over the last year, the fastest annual growth rate in nearly 50 years, and GDP has increased almost 23% since the launch of ChatGPT in late 2022. Manufacturing now makes up nearly 40% of the nation’s economy, the highest since the late 1980s. Growth in net exports has driven the vast majority of this boom, as data center builders in the US, China, and beyond try to get their hands on as much compute as possible. Gross exports exceed $63B per month, more than double the pre-COVID average. Taiwan’s massive trade surplus is being shoved into the acquisition of foreign financial assets, plus record foreign direct investment by TSMC. Yet buying of debt securities - mostly long-dated US Treasury bonds—has dried up dramatically. Taiwanese life insurers are usually some of the world’s largest buyers of US bonds, but were actually net sellers to the tune of $7.9B in 2025. The majority of Taiwan’s surplus is absorbed by unusually large outbound foreign direct investment by companies like TSMC (net FDI is at $35B, more than 10x 2019 levels) and a rapid increase in non-bond lending abroad.

Takeaways by Macro Roundup® AI

  1. Taiwan's GDP rose at a 23.6% annualized rate in 2025:Q4, the fastest pace since its initial recovery from the 2008 recession, as demand for AI chips from TSMC buoyed the economy.
  2. Taiwan's economy grew more than 12% over the past year, the fastest annual rate in nearly 50 years, with manufacturing at nearly 40% of the economy and gross exports above $63bn per month, more than double the pre-COVID average.
  3. Taiwanese life insurers, usually among the world's largest buyers of US bonds, were net sellers of $7.9bn in 2025, while net outbound FDI by firms such as TSMC reached $35bn, more than 10x 2019 levels.

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AI Summary. The authors estimate replacing two destroyed U.S. radars would take five to eight years and $1.1bn for one and 12–24 months and $50m–$75m for the other, making supply-chain fragility and replacement timelines a greater constraint than materials cost. Both systems require gallium, of which China controls 98% of global supply.

Macdonald Amoah, Morgan Bazilian, and Jahara Matisek Foreign Policy
Date Posted:
Is Database:
Database

A Colorado School of Mines analysis of the munitions used in the first 36 hours of the war estimates the “mineral bill” and highlights the current and target timelines to replenish these systems, noting critical minerals “cannot be surged.”

Do replacement timelines constrain radar rebuilding more than materials cost?

Core argument: The first 36 hours of the war consumed over 3,000 U.S.-Israeli munitions, and two advanced U.S. radars were destroyed: the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain.

Beyond the sheer volume of munitions, the loss of high-value assets introduces another layer of complexity. The destruction of two advanced U.S. radars, the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain, highlights a problem where the total weight of the “mineral bill” is less of a concern than the extreme fragility of the supply chain and the extensive timelines for replacement. Per our analysis, for the AN/FPS-132, it will take five to eight years for Raytheon to build a new radar at a cost of $1.1 billion. Meanwhile, Lockheed Martin will require at least 12 to 24 months and an estimated $50 million to $75 million to replace the AN/TPS-59, based on the original Bahrain Foreign Military Sales contract adjusted for inflation. The biggest issue for the defense industrial base will be sourcing the 77.3 kilograms of gallium needed for both systems, a material for which China controls 98% of the global supply. This is not to mention the 30,610 kilograms of copper that will also be needed, a commodity facing surging demand from the technology sector.

Takeaways by Macro Roundup® AI

  1. The first 36 hours of the war consumed over 3,000 U.S.-Israeli munitions, and two advanced U.S. radars were destroyed: the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain.
  2. By the authors' analysis, replacing the AN/FPS-132 will take Raytheon five to eight years at a cost of $1.1 billion, while Lockheed Martin needs at least 12 to 24 months and an estimated $50 million to $75 million for the AN/TPS-59.
  3. Sourcing the 77.3 kilograms of gallium needed for both radars is, by the authors' assessment, the biggest issue for the defense industrial base, since China controls 98% of global supply; the systems also require 30,610 kilograms of copper.

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