Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…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
  • “…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
  • “…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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 19, 2026

AI Summary. Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

Hendrik Bessembinder Arizona State University
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Btw January 1926 and December 2025, 60% of US firms had negative total returns relative to T-bills. 46 firms accounted for half of the $91T in net wealth creation over the period, and 1,082 firms, 3.7%, accounted for 100% of net wealth creation.

Do a few firms drive a century of stock market wealth?

Core argument: U.S. publicly traded stocks generated some $91 trillion in shareholder wealth enhancement over a 100-year period in the CRSP data, according to the author's calculations.

Two central conclusions emerge from this study of long-term investment outcomes in the CRSP data. First, stocks publicly traded in the U.S. markets were, despite periodic volatility, a tremendous source of wealth enhancement, totaling some $91 trillion by my calculations over the 100-year period. Second, long-term stock market outcomes demonstrate strong positive skewness, and the success of the overall markets is attributable to a substantial extent to very strong outcomes for a relatively few firms. This skewness is of practical importance. Financial planning is often based on expected or mean future returns. The outcome of such an exercise is informative, but it should be recognized that in a skewed distribution most possible future outcomes are less than the expected or mean outcome. While the distribution of possible outcomes to diversified portfolios is less skewed than for individual stocks, positive skewness is present at long time horizons in any case. Analyses focused on the median outcome, or better yet on the entire distribution of potential outcomes, are more informative. The historical U.S. stock return data shows that both buy-and-hold returns and dollar based measures of shareholder wealth enhancement are dominated by relatively few high performing firms.

Takeaways by Macro Roundup® AI

  1. U.S. publicly traded stocks generated some $91 trillion in shareholder wealth enhancement over a 100-year period in the CRSP data, according to the author's calculations.
  2. Long-term U.S. stock market outcomes display strong positive skewness, with overall market success attributable to a substantial extent to very strong outcomes for a relatively few firms.
  3. Because most possible outcomes in a skewed distribution fall below the mean, the author argues that analyses focused on median outcomes or the entire distribution are more informative, noting positive skewness persists for diversified portfolios at long horizons.

Related Articles:

  • 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.
  • 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.
  • Entire Market Structure Exposed To A Big Move — The share of S&P 500 stocks moving more than 10% in a single day has increased, and high dispersion alongside low implied correlation suggests stocks are trading more on their own fundamentals. Combined with extremely elevated options activity, these larger idiosyncratic moves leave market structure more vulnerable to an abrupt, outsized move.

AI Summary. The annual compensation gap between top industry and academic artificial intelligence researchers widened from roughly $294,000 to $1.5m, coinciding with accelerating academic out-migration toward large incumbent technology firms. Researchers who move to industry cut paper production by about 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary innovation.

Ufuk Akcigit, Craig Chikis, Emin Dinlersoz, and Nathan Goldschlag University of Chicago
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In 2001, 48% of AI researchers were in industry; by 2019—two years after the landmark transformer paper—68% were. Over this period, the compensation gap btw industry and academia for top 1% researchers widened markedly, from ~$294k to ~$1.5mm annually.

How does the pay gap shift AI research from publishing to patenting?

Core argument: The annual compensation gap between top industry and academic AI researchers widened from roughly $294,000 to $1.5 million, a fivefold increase since 2001, per a dataset linking publication records to administrative employer–employee data.

Using a novel dataset linking publication records to administrative employer–employee data, we document profound changes in AI talent allocation over two decades. The compensation gap between top industry and academic AI researchers widened from roughly $294,000 to $1.5 million annually—a fivefold increase since 2001. This divergence coincided with accelerating academic out-migration, particularly among early-career researchers, and an increasing concentration of talent flows toward large, incumbent technology firms rather than startups. These patterns reflect a structural reorganization of frontier AI research. Researchers who transition to industry reduce paper production by approximately 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary and commercially oriented innovation. Even among those who remain in academia, moonlighting has risen substantially. Frontier AI research has become increasingly capital intensive and concentrated within large firms. Universities may no longer be able to compete at the frontier of computational scale, but they continue to play a central role in preserving open science, training general human capital, and providing outside options in the market for research talent.

Takeaways by Macro Roundup® AI

  1. The annual compensation gap between top industry and academic AI researchers widened from roughly $294,000 to $1.5 million, a fivefold increase since 2001, per a dataset linking publication records to administrative employer–employee data.
  2. AI researchers who move to industry reduce paper production by approximately 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary, commercially oriented innovation.
  3. Academic out-migration of AI researchers accelerated, particularly among early-career researchers, with talent flows concentrating toward large, incumbent technology firms rather than startups, while moonlighting rose among those remaining in academia.

Related Articles:

AI Summary. Refining margins have jumped to nearly $50 a barrel from $20, approaching record highs, pushing wholesale fuel prices sharply higher: diesel near $185 a barrel, jet fuel near $150, and both fuel oil and gasoline above $100. Diesel is a particular concern because it powers construction, transport and farming.

Javier Blas Bloomberg
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WTI is up ~70% since January, but still under $100 a barrel. US wholesale gasoline and jet fuel are up ~84%, and worryingly, wholesale diesel is up ~109%. Refinery margins are nearing 2022’s all-time high, ~$50 per barrel, vs. $20 per barrel in January

Do refining margins matter more than crude prices for fuel costs?

Core argument: U.S. refinery margins, measured as two barrels of gasoline and one of distillate per three barrels of WTI crude, have jumped to nearly $50 a barrel from $20 in January, approaching 2022's high, and the cost of everyday fuels has surged.

For every three barrels of WTI crude the refinery processes, it makes two barrels of gasoline and one barrel of distillate fuel such as diesel or jet fuel. Measured by that benchmark, refinery margins are approaching 2022’s all-time high point, having jumped to nearly $50 a barrel from $20 in January. Consequently, the cost of everyday fuels has surged. Look at what Main Street buys. In the most extreme case, wholesale diesel prices have spiked to nearly $185 a barrel. Jet fuel is flirting with $150, and both fuel oil and gasoline are commanding $100-plus prices in the wholesale market. Diesel is a particular concern because it fuels the American economy: construction, transport and farming. Diesel engines are famously reliable and slow, designed for strength not speed. Its price inflation is similar: It is grinding ever higher and will endure a long while.

Takeaways by Macro Roundup® AI

  1. U.S. refinery margins, measured as two barrels of gasoline and one of distillate per three barrels of WTI crude, have jumped to nearly $50 a barrel from $20 in January, approaching 2022's high, and the cost of everyday fuels has surged.
  2. Wholesale diesel prices have spiked to nearly $185 a barrel, jet fuel is near $150, and both fuel oil and gasoline are commanding $100-plus wholesale prices.
  3. Diesel is a particular concern because it fuels American construction, transport and farming, and its price inflation is grinding ever higher and will endure a long while.

Related Articles:

  • Iran and the US Economy — Commodity strategists project Brent crude to average $98 over two months—40% above the prior year's average—before falling to $71 by late 2026, with a 60-day disruption of oil flows through the Strait of Hormuz pushing prices to $145. On these forecasts, headline inflation is projected at 2.9%, growth at 2.2%, and peak unemployment at 4.6%.
  • 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.
  • Markets Are Still Sanguine About the Oil Outlook — Crude oil from Iran, Iraq, Kuwait, Saudi Arabia, Qatar, and the UAE equaled about 20% of global supply and over 40% of crude exports, and much is now unavailable with Strait of Hormuz traffic near zero, yet Brent futures trade near $103/barrel. Past smaller disruptions required larger, slower price adjustments.

AI Summary. Statistics Canada estimates the country's population fell by about 102,436 people, or 0.2%, over the course of a year to 41.47 million, its first annual decline on record, driven by a steep reduction in temporary residents. Deaths exceeded births in the latest quarter, the second consecutive quarterly population drop.

Robb Stewart Wall Street Journal
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Canada’s population fell by .2% or 103,504 people in 2025, as immigration policy changes curtailed inflows. Births fell short of deaths by 781 people in Q4. 83,168 permanent immigrants entered Canada in Q4, down ~ 20% y/y.

Are fewer temporary residents driving Canada's first recorded annual population decline?

Core argument: Canada's population fell by an estimated 102,436 people, or 0.2%, over 2025 to 41.47 million as of January 1, the first annual decline on record, according to preliminary Statistics Canada estimates.

Preliminary demographic estimates [by Statistics Canada] indicate the country’s population stood at 41.47 million as of January 1, after it shrank by 103,504 people, or 0.2%, in the final quarter of last year. That marked a second straight quarter of decline, the first back-to-back drop recorded, and outweighed the increase in the population over the first six months of last year. As a result, the population fell by an estimated 102,436 over the course of 2025, a dip of 0.2%. The contraction was driven by a steep reduction in temporary residents, exacerbating ongoing demographic aging. The change from quarterly population growth highs above 3% as recently as mid-2024 has broad implications for the economy, the labor market and housing demand. Births minus deaths was a negative 781 in the fourth quarter, meaning that there were more deaths than births in Canada in the latest quarter.

Takeaways by Macro Roundup® AI

  1. Canada's population fell by an estimated 102,436 people, or 0.2%, over 2025 to 41.47 million as of January 1, the first annual decline on record, according to preliminary Statistics Canada estimates.
  2. Canada's population shrank by 103,504, or 0.2%, in the fourth quarter, a second consecutive quarterly decline and the first back-to-back drop recorded, driven by a steep reduction in temporary residents.
  3. Births minus deaths in Canada was negative 781 in the fourth quarter, and the shift from quarterly population growth above 3% as recently as mid-2024 has broad implications for the economy, the labor market and housing demand.

Related Articles:

  • Immigration Surge Fuels Male Population Boom in Canada — Canada's adult male population grew 3.4% over the past year versus 2.9% for women, the widest gap in nearly 50 years of records, as a higher share of male newcomers shifts the gender ratio. Among those aged 25 to 44, men outnumber women by 141,000, against a long-run average of zero.
  • A “Heat Dome” of Immigration — Canada has adopted some of the most aggressive immigration policies in the OECD, adding 1.273m residents in a year to reach a population of 41m — proportionally equivalent to the US admitting more than 10m immigrants annually. Canadians are increasingly angry as housing prices soar, sprawl expands, and traffic worsens.
  • How Canada Is Responding to American Mercantilism — US tariffs as high as 35% on certain goods not compliant with the US-Mexico-Canada trade agreement have coincided with falling Canadian exports, weaker business confidence and investment, a softening labor market, and a contraction in Canadian output. Canada has responded by aiming to double non-US exports within 10 years, expanding fiscal spending and deregulation, and keeping monetary policy loose.

AI Summary. Taiwan is marketing drones built without Chinese parts to the US and allies concerned about Chinese espionage and supply-chain control, with production rising from about 10,000 units to more than 12x that level and exports climbing more than 35-fold to roughly 123,000 units. The Czech Republic and Poland were the largest buyers.

Economist Staff The Economist
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Taiwan’s drone production increased from ~10,000 units in 2024 to ~135,000 last year. The country plans to be able to produce 180,000 “non-red” drones (those excluding any Chinese component) annually by the end of 2028.

Is demand rising for drones built without Chinese parts?

Core argument: Taiwan's UAV production rose from about 10,000 units in 2024 to more than 12 times that in 2025, with exports up more than 35-fold to roughly 123,000 units, nearly all of its output.

Taiwan positions itself as a supplier of “non-red” unmanned aerial vehicles or UAVs—ie, without Chinese parts—to America, its allies and other countries worried about China’s espionage and control over industrial supply chains. Taiwan’s production of UAVs has increased from about 10,000 units in 2024 to more than 12 times that in 2025. Its exports rose more than 35-fold to about 123,000 units last year—almost all its output. The Czech Republic was its biggest buyer, followed by Poland (see chart). Industry insiders say their purchases mostly went to Ukraine, where many are used on the battlefield, giving valuable feedback on their performance. Another bumper year for exports is expected in 2026, after reaching 85,500 units in the first two months. Taiwan has pledged to build an entirely non-red UAV industry by the end of 2026, with annual output of 180,000 units by 2028. Last year it also promised to buy more than 200,000 drones for its own armed forces by 2033.

Takeaways by Macro Roundup® AI

  1. Taiwan's UAV production rose from about 10,000 units in 2024 to more than 12 times that in 2025, with exports up more than 35-fold to roughly 123,000 units, nearly all of its output.
  2. The Czech Republic was the largest buyer of Taiwanese drones, followed by Poland, and industry insiders say those purchases mostly went to Ukraine, where battlefield use generates feedback on performance.
  3. Taiwan has pledged to build an entirely "non-red" UAV industry free of Chinese parts by the end of 2026, with annual output of 180,000 units by 2028 and purchases of more than 200,000 drones for its own armed forces by 2033.

Related Articles:

  • Ukraine Reaches a Milestone: Making ‘China-Free’ Drones — Ukraine has produced drones built without Chinese components, though mass production remains unlikely because Chinese parts are much cheaper and China's manufacturing dominance makes any drone hard to classify as truly "China-free." Two Ukrainian companies making such drones were selected among 11 firms to compete for US Defense Department contracts for low-cost attack drones.
  • Can Drones Be Stockpiled? Europe Wrestles With Weapons Dilemma — European defense officials argue that small, cheap drones have proven as effective as heavy armour in Ukraine, but stockpiling millions of them risks holding weapons made obsolete within months by new software, radio frequencies, and autonomous navigation. Drones that dominate one week can be jammed or outclassed the next.
  • 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.

Friday, March 20, 2026

AI Summary. The author argues the Federal Reserve is wrong to attribute excess inflation mostly to goods prices driven by tariffs, since services make up the bulk of economic activity. Prices of services businesses buy as production inputs have been accelerating, as has consumer services inflation excluding imputed prices, housing, and utilities.

Matt Klein The Overshoot
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Countering Powell’s view that current inflation is mostly about goods prices and heavily tariff-driven, Klein points to broad-based increases in services prices, and suggests that even absent the war, the Fed was not headed towards meeting its 2% target.

Is the Fed wrong to blame inflation mainly on tariffs and goods?

Core argument: Consumer goods prices were rising about 2% a year on the eve of the war with Iran and accelerating, against flat prices in 2024 and annual declines of roughly 0.5%–1% in the years immediately preceding the pandemic.

Perhaps the most striking thing about Powell’s Wednesday press conference was the repeated—and wrong—insistence that excessive inflation was mostly about rising goods prices, which in turn were mostly about tariffs. To be fair, goods inflation was getting worse [prior to] the Iran conflict, and in some significant categories was worse than in the 2021H2-2022H1 price spike. In the years immediately preceding the pandemic, consumer goods prices regularly fell about 0.5%-1% each year. In 2024, those prices were flat. As of the eve of the war with Iran, consumer goods prices were rising by about 2% a year—and the pace was accelerating. Services represent the bulk of economic activity, and should be making Fed officials worry that their 2% inflation target is out of reach. Prices of services purchased by businesses as inputs to their production have been accelerating rapidly in the past few months. Stage 2 services inflation would likely be even faster if not for the fact that the official price of “business loans” is falling by 25% a year, the fastest rate on record outside of the pandemic. On the consumer side, the Personal Consumption Expenditures (PCE) price index for services excluding imputed prices, housing (which has known issues with measurement lags), and utilities (which can be volatile and mask underlying trends) has actually been accelerating recently.

Takeaways by Macro Roundup® AI

  1. Consumer goods prices were rising about 2% a year on the eve of the war with Iran and accelerating, against flat prices in 2024 and annual declines of roughly 0.5%–1% in the years immediately preceding the pandemic.
  2. Powell insisted at his press conference that excessive inflation was mostly about rising goods prices driven by tariffs, a characterization the author argues is wrong because services, the bulk of economic activity, put the 2% target out of reach.
  3. Prices of services purchased by businesses as production inputs have accelerated rapidly in recent months, and would likely be rising faster still were the official price of "business loans" not falling 25% a year, the fastest rate on record outside the pandemic.

Related Articles:

  • Why Did Inflation Rise And Fall In 2021-24? Channels And Evidence From Expectations — Across countries, unexpectedly higher government deficits relative to earlier International Monetary Fund forecasts are associated with unexpectedly higher inflation, measured by each factor's contribution to the increase in public debt, a relationship the author finds statistically significant. This evidence is consistent with a fiscal channel for inflation.
  • Why Did Inflation Rise And Fall In 2021-24? Channels And Evidence From Expectations — Across countries, unexpectedly higher government deficits relative to earlier International Monetary Fund forecasts are associated with unexpectedly higher inflation, measured by each factor's contribution to the increase in public debt, a relationship the author finds statistically significant. This evidence is consistent with a fiscal channel for inflation.
  • Inflation is Persistent and Consumers are Flush. Falling Rates Could be Dangerous — U.S. household and nonprofit net worth equals roughly 8.5 years of personal consumption spending, down from a peak of 9 years but above the 7.7-year average of 2018-2019. The author argues that cutting interest rates with inflation persistent risks unleashing this untapped financial firepower as additional consumer spending that would largely show up in higher prices rather than higher output.

AI Summary. Analysts forecast 2.6% global growth on an annual average basis, down from 2.9% before the war in Iran, with headline inflation of 2.9% versus 2.3% prior. They argue the supply risk is mostly confined to energy, limiting the chance of a repeat of the severe shipping disruptions and second-round inflation effects seen in 2021-2022.

Joseph Briggs and Megan Peters Goldman Sachs
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GS estimates that higher oil prices will boost headline inflation by 50–60bps over the next year. The selloff at the front-end – 50bps in the Euro Area and 40bps in the US – suggests markets expect central banks will keep a lid on inflationary pressures.

Is the war's supply shock mostly limited to energy?

Core argument: The global growth forecast was cut to 2.6% on an annual average basis from 2.9% before the war in Iran, while the Q4/Q4 headline inflation forecast was raised to 2.9% from 2.3%.

We now accordingly forecast 2.6% global growth (vs. 2.9% prior to the war) on an annual average basis, and 2.9% headline inflation on a Q4/Q4 basis (vs. 2.3%). The recent selloff in front end rates [Exhibit 1] shows that end-2026 policy rate pricing has increased notably in the UK (+63bp), Euro Area (+50bp), US (+40bp), Canada (+39bp), and Australia (+31bp) since the start of the war [and] signals an expectation that global central banks will be especially sensitive to higher inflation given the recent memory of post-pandemic supply disruptions and associated surge in inflation. In summary, our analysis suggests that the major risk to global supply and inflation is mostly confined to energy, which limits the risk that the severe supply chain disruptions (and associated surge in inflation) and large second-round inflation effects observed in 2021-2022 will re-emerge. The problematic shipping disruptions from 2021-2022 appear less likely to repeat. Gulf economies are not major re-exporters of most products (aside from boats), non-tanker ocean shipping costs have actually ticked down since the start of the war, and the recent rise in airfreight prices (while notable) implies less than 5bp upside to global inflation.

Takeaways by Macro Roundup® AI

  1. The global growth forecast was cut to 2.6% on an annual average basis from 2.9% before the war in Iran, while the Q4/Q4 headline inflation forecast was raised to 2.9% from 2.3%.
  2. End-2026 policy rate pricing has risen since the start of the war by 63bp in the UK, 50bp in the Euro Area, 40bp in the US, 39bp in Canada, and 31bp in Australia, signaling expected central bank sensitivity to higher inflation.
  3. The analysis suggests supply risk is mostly confined to energy: Gulf economies are not major re-exporters of most products aside from boats, non-tanker ocean shipping costs have ticked down since the war began, and higher airfreight prices imply less than 5bp of global inflation.

Related Articles:

  • The White House Is Using the Wrong Oil Price for the Iran War — Refining margins have jumped to nearly $50 a barrel from $20, approaching record highs, pushing wholesale fuel prices sharply higher: diesel near $185 a barrel, jet fuel near $150, and both fuel oil and gasoline above $100. Diesel is a particular concern because it powers construction, transport and farming.
  • War Cost Sinks Long-Term Government Bonds on Deficit Worries — Investor concern that the Iran war will raise government spending and widen budget deficits has triggered a selloff in long-term government bonds, pushing the 30-year US Treasury yield near 4.90% and lifting yields from the UK and Germany to Australia and Japan. A global borrowing wave could further pressure the $31tn US Treasury market.
  • 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.

AI Summary. Internal Revenue Service data show residents leaving Massachusetts took a net $4.2bn in adjusted gross income with them, an 8% year-over-year increase, in the first year of a 4% surtax on incomes above $1m, though the number of departing taxpayers slowed. Net outflows predate the surtax, and surtax collections have risen every year.

Greg Ryan Bloomberg
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Net outflows of adjusted gross income from Massachusetts increased 8% y/y in 2023 to $4.2B, after a 4% surtax on income over $1mm took effect. Top earners leaving the state were responsible for 70% of the outflow.

Does a millionaire surtax accelerate income leaving the state?

Core argument: Residents leaving Massachusetts took a net $4.2 billion in adjusted gross income with them in 2023, an 8% year-over-year increase and one of the largest totals in the country, according to Internal Revenue Service data.

Residents exiting Massachusetts took a net of $4.2 billion in adjusted gross income with them in 2023, one of the largest totals in the country, after a tax on millionaires took effect. The amount was an 8% year-over-year increase, according to Internal Revenue Service data, even as the total number of taxpayers leaving the state slowed. This was the first year that residents were subject to a 4% surtax on incomes over $1 million after voters approved the levy in 2022 to fund schools and transportation. Despite the tax’s implementation, the number of residents moving out of Massachusetts who reported income of $200,000 or more — the top bracket tracked in the IRS data — fell year-over-year. Net outflows from Massachusetts long predate the millionaires tax, especially to Florida and New Hampshire, its northern neighbor, which has no tax on wages or capital gains. Total lost income was also higher in 2021 than 2023. The state’s millionaires-tax collections have increased every year since 2023 and so far in fiscal 2026 have jumped 19% year-over-year to $1.3 billion.

Takeaways by Macro Roundup® AI

  1. Residents leaving Massachusetts took a net $4.2 billion in adjusted gross income with them in 2023, an 8% year-over-year increase and one of the largest totals in the country, according to Internal Revenue Service data.
  2. The number of Massachusetts out-migrants reporting income of $200,000 or more, the top bracket tracked in IRS data, fell year-over-year in 2023, the first year of the voter-approved 4% surtax on incomes above $1 million.
  3. Massachusetts millionaires-tax collections have risen every year since 2023 and are up 19% year-over-year to $1.3 billion so far in fiscal 2026, while net outflows to Florida and New Hampshire predate the surtax.

Related Articles:

  • The Net Present Value of the Billionaire Tax Act: An Assessment of the Fiscal Effects of California’s Proposed Wealth Tax — A proposed one-time 5% California tax on the worldwide net worth of individuals above $1bn would have positive net present value only if its revenue exceeds the present value of income taxes lost to departing billionaires. The authors' simulations yield negative net present value in 71% of draws, averaging -$24.7bn.
  • Behavioral Responses to State Income Taxation of High Earners: Evidence from California — A California ballot measure raising top marginal income tax rates by up to 3 percentage points prompted an additional 0.8% of the affected tax base to leave the state, with an estimated income elasticity of 2.5–3.2 for high earners who stayed. The authors estimate these responses eroded 45.2% of windfall revenues within one year and 60.9% within two.
  • The Robin Hood State Is Coming For The Rich — In the US, increased redistribution has offset rising pre-tax inequality: Congressional Budget Office data show inequality of taxable income near record highs while inequality after taxes and transfers was lower than in several earlier years and only slightly above 1986. The top 1% of earners paid 40% of income tax in 2022, up from 33% in 2001.

AI Summary. Eurozone industrial production fell 1.2% year on year, with chemical output down 6.6%, while production of weapons and ammunition rose 31% to a record high and aerospace output rose 15%, indicating a split between energy-intensive sectors and defense-linked manufacturing.

Valentina Romei Financial Times
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Eurozone industrial production was down 1.2% y/y, led by energy-intensive sectors such as chemicals (down 6.6%) and metals. On the other side of Europe’s “split screen,” aerospace production rose 15% and production of weapons and ammunition was up 31%.

Is European manufacturing splitting between energy-intensive sectors and defense production?

Core argument: Eurozone production of weapons and ammunition jumped 31% year on year in January to a record high, while overall eurozone industrial production fell 1.2%, according to Eurostat data.

Europe’s industrial base is having a bit of a split-screen moment. On one side: chemicals, metals and other energy-guzzling stalwarts. All are still reeling from high gas prices and now staring down another squeeze as oil and natural gas jump on the back of the war in the Middle East. On the other: weapons, planes and anything with a defence budget attached. These are quietly (or not so quietly) booming. The latest Eurostat data captures the divergence neatly. Eurozone industrial production fell 1.2% year on year in January, with chemical output down a chunky 6.6%. Meanwhile, production of weapons and ammunition jumped 31% to a record high. Aerospace is having a moment, with eurozone output up 15% on the year to January and posting double-digit growth in most recent months.

Takeaways by Macro Roundup® AI

  1. Eurozone production of weapons and ammunition jumped 31% year on year in January to a record high, while overall eurozone industrial production fell 1.2%, according to Eurostat data.
  2. Eurozone chemical output fell 6.6% year on year in January, with energy-intensive sectors such as chemicals and metals still reeling from high gas prices and facing another squeeze as oil and natural gas prices jump on the war in the Middle East.
  3. Eurozone aerospace output rose 15% in the year to January and posted double-digit growth in most recent months.

Related Articles:

  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.
  • 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.
  • 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.

AI Summary. The share of Chinese who believe effort is always rewarded fell from 62% in 2004 to 28% in 2023, according to survey research, with respondents now citing unequal opportunity, connections, and being born rich as the keys to wealth. Those reporting their family situation had improved over the prior five years fell from about 70% to 39%.

Economist Staff The Economist
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Piketty’s data suggest China’s top 10% hold 68% of net personal wealth, on par with the US. As the wealth distribution has shifted, sentiment has declined. In 2004, 62% of Chinese felt “effort is always rewarded;” by 2023, the share had fallen to 28%.

Are Chinese losing faith that hard work brings success?

Core argument: The share of Chinese who believe "effort is always rewarded" fell from 62% in 2004 to 28% in 2023, according to a paper by Michael Alisky, Scott Rozelle and Martin Whyte.

Many Chinese once viewed wealth and success as reflections of hard work or intelligence. The rich were an advertisement for the dream of advancement. In 2004, according to a paper by Michael Alisky, Scott Rozelle and Martin Whyte, 62% of Chinese felt that “effort is always rewarded” and blamed poverty on lack of ability. But in recent years economic growth has slowed sharply and ordinary Chinese have become gloomy about their prospects. The proportion who think hard work pays off fell to 28% in 2023. People now see unequal opportunity as the biggest factor contributing to poverty; connections and being born rich are considered the keys to wealth. They think mobility has slowed. From 2004 to 2014 70% of respondents thought their family situation was better or much better than five years before. In 2023 only 39% thought so.

Takeaways by Macro Roundup® AI

  1. The share of Chinese who believe "effort is always rewarded" fell from 62% in 2004 to 28% in 2023, according to a paper by Michael Alisky, Scott Rozelle and Martin Whyte.
  2. Chinese respondents now identify unequal opportunity as the biggest factor contributing to poverty, and view connections and being born rich as the keys to wealth.
  3. The share of Chinese saying their family situation was better than five years earlier fell from 70% between 2004 and 2014 to 39% in 2023.

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