Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a 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
  • “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


Friday, March 27, 2026

AI Summary. The U.S. average gasoline price rose by nearly $1 a gallon, from about $2.90 to $3.70, according to the Energy Information Administration — the second-largest four-week increase in at least 30 years, exceeded only by the jump after Hurricane Katrina. With the typical U.S. driver covering about 1,000 miles a month, that adds up to $50 monthly.

Francesca Paris New York Times
Date Posted:

American gas prices have increased by ~27% nationally since the start of the Iran War. However, in real terms they are still well under their 2022 and summer 2008 levels.

How much does a near-dollar gas price jump cost drivers monthly?

Core argument: U.S. average gas prices rose from about $2.90 per gallon in mid-February to $3.70 by mid-March, according to the Energy Information Administration, a gain of nearly a dollar since the start of the war in Iran.

Since the start of the war in Iran, the average price of gas in the United States has climbed by nearly a dollar. In mid-February, gas cost around $2.90 per gallon. By mid-March, it was up to $3.70, according to the Energy Information Administration. It’s the second-largest four-week increase in at least 30 years — bigger than the one at the start of the war in Ukraine in 2022, or the ones associated with the post-recession surge of 2009 and the OPEC production cuts in 1999. The only bigger jump came after Hurricane Katrina in 2005, when gas supply fell significantly. The typical U.S. driver travels around 1,000 miles each month. Depending on the car, those higher prices translate to as much as $50 more a month.

Takeaways by Macro Roundup® AI

  1. U.S. average gas prices rose from about $2.90 per gallon in mid-February to $3.70 by mid-March, according to the Energy Information Administration, a gain of nearly a dollar since the start of the war in Iran.
  2. The four-week increase in U.S. gas prices is the second-largest in at least 30 years, exceeding those at the start of the Ukraine war in 2022, the post-recession surge of 2009, and the 1999 OPEC production cuts.
  3. Only the jump after Hurricane Katrina in 2005, when gas supply fell significantly, was larger, and for the typical U.S. driver covering about 1,000 miles a month the higher prices mean as much as $50 more monthly.

Related Articles:

  • Bad News Bias in Gasoline Price Coverage — An analysis of over one million television transcripts finds that coverage of gasoline prices shows a negative news bias, ramping up sharply once the nominal price reaches $3.50 a gallon, most steeply at Fox News. Because that threshold is fixed in nominal terms, the inflation-adjusted trigger has fallen by one-third.
  • 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.
  • Testing Resilience — Inflation across the G20 is projected to run 1.2 percentage points higher than previously expected at 4% before easing to 2.7% the following year, while core inflation in G20 advanced economies is anticipated to weaken from 2.6% to 2.3%. These projections assume energy market disruption moderates, with oil, gas and fertiliser prices declining gradually.

AI Summary. The author argues that energy, rather than fixed income, now serves as the true hedge to equity positions, pushing investors, companies and countries to review their energy allocations and policies. Chinese government bonds diversified equity risk when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.

Louis-Vincent Gave Gavekal
Date Posted:

Prior to the war, investors had largely stopped hedging energy-driven inflation. Gave argues that now “the true hedge to equity positions is no longer fixed income, but energy,” and notes China is “weathering the storm better than others.”

Has energy replaced fixed income as the true hedge to equities?

Core argument: The author argues the balanced portfolio is dead and that energy, not fixed income, has replaced fixed income as the true hedge to equity positions, a claim that holds truer the more policy worldwide remains unpredictable.

The past two weeks have once again illustrated that the balanced portfolio is dead and that the true hedge to equity positions is no longer fixed income, but energy. The more policy around the world remains unpredictable, the truer it will be. The closure of the Hormuz Strait is now forcing investors, companies and entire countries to accept this simple truth and review their energy allocations and policies. Once again, in this crisis, Chinese government bonds did their job diversifying equity risk when no other major bond market did so. This makes sense since China is the only major economy with no meaningful inflation problem. China is also one of the few major economies to have followed a rational, and consistent, energy policy over the past decade. [Since the start of the Iran War] Chinese government bonds did their job diversifying equity risk when no other major bond market did so. This makes sense since China is the only major economy with no meaningful inflation problem.

Takeaways by Macro Roundup® AI

  1. The author argues the balanced portfolio is dead and that energy, not fixed income, has replaced fixed income as the true hedge to equity positions, a claim that holds truer the more policy worldwide remains unpredictable.
  2. Chinese government bonds diversified equity risk since the start of the Iran War when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.
  3. The closure of the Hormuz Strait is forcing investors, companies and countries to review their energy allocations and policies, with China cited as one of the few major economies to have followed a rational, consistent energy policy over the past decade.

Related Articles:

  • High Prices and Upside Risks for Longer — Oil flows through the Strait of Hormuz are projected to stay at just 5% of normal levels for six weeks before a gradual one-month recovery. The authors expect the resulting supply shock to prompt policymakers to rebuild strategic reserves and markets to price a security premium into long-dated oil.
  • 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.
  • 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.

AI Summary. Liquidity in the US Treasury market has deteriorated, with the size of trades needed to move prices down roughly 40-50% in cash bonds and as much as 80% in shorter-dated bond futures, according to market participants. Recent auctions of two- and five-year government debt were weak, leaving dealers to absorb unusually large shares.

Kate Duguid and Ian Smith Financial Times
Date Posted:

There has been a deterioration in Treasury market liquidity since the start of the Iran War, as market depth fell ~ as much as it did around Liberation Day. Treasury auctions saw tepid private demand this week; modest trades were able to impact prices.

Is liquidity in the Treasury market deteriorating?

Core argument: Treasury cash-market depth has fallen roughly 40–50% versus prewar levels, according to AllianceBernstein, while JPMorgan Chase notes the drop nearly matches the decline that followed Trump's "liberation day" announcement.

JPMorgan Chase noted this week that the size of trades required to move prices, known as “market depth,” has fallen by nearly as much as it did following Trump’s liberation day announcement. With that volatility driving traders to the sidelines, market depth has declined by roughly 40-50% in the cash market compared to prewar levels, according to AllianceBernstein. In shorted-dated bond futures, derivatives that are widely used to bet on or hedge against moves in bonds, market depth has declined by as much as 80% this week compared to this year’s average, according to an executive at a large asset manager. US government auctions of new shorter-dated bonds have also gone poorly this week. At Tuesday’s sale of $69bn worth of two-year bonds, dealers — the big banks that are forced to mop up any bonds not purchased by investors — took the largest percentage of the offering since 2022. The same pattern was seen at Wednesday’s auction of $70bn of five-year notes, where dealers purchased the most since 2024. An auction of seven-year notes on Thursday was moderately better, but still weak by historical standards.

Takeaways by Macro Roundup® AI

  1. Treasury cash-market depth has fallen roughly 40–50% versus prewar levels, according to AllianceBernstein, while JPMorgan Chase notes the drop nearly matches the decline that followed Trump's "liberation day" announcement.
  2. Depth in short-dated bond futures, derivatives used to bet on or hedge bond moves, has fallen by as much as 80% against this year's average, according to an executive at a large asset manager.
  3. Dealers took the largest share of a two-year Treasury auction since 2022 at a $69bn sale and the most since 2024 at a $70bn five-year sale, while a seven-year auction was moderately better but weak by historical standards.

Related Articles:

  • 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.
  • $14 Trillion in IG Supply Coming to the Market — About $14tn of investment-grade fixed income supply is coming to market, combining roughly $10tn of US government debt to be refinanced over the next 12 months, a budget deficit near $2tn, and about $2tn of gross corporate bond issuance boosted by data-center builders. The author argues this growing supply is putting upward pressure on interest rates and credit spreads.

AI Summary. The authors estimate that state legalization of sports betting raises average quarterly betting spending per person by about $46 from a pre-legalization mean of $2.50, with spillover spending in nearby counties where betting is illegal. Three years later, median credit scores are one point lower and delinquency rates 0.31 percentage points higher.

Jacob Goss and Daniel Mangrum Federal Reserve Bank of New York
Date Posted:
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After the legalization of sports betting in 2018, delinquency rates on a wide range of consumer debts rose, increasing .31pp as of 2025. The delinquency rate for the ~3% of the population that were new gamblers increased by ~10pp driven by those under 40.

How does legalizing sports betting affect spending and consumer credit?

Core argument: State legalization of sports betting raises average quarterly betting spending per person by roughly $46 from a pre-treatment mean of $2.50 and lifts the share of the population with any sportsbook spending by 3.1 percentage points.

Exploiting the staggered roll-out of state-level legalization following the 2018 Murphy v. NCAA decision, we use an extended two-way fixed effects (ETWFE) framework that separately estimates direct treatment effects and cross-border spillover effects. Our first-stage estimates establish that legalization dramatically increases betting activity: average quarterly spending per person rises by roughly $46 from a pre-treatment mean of $2.50, and the share of the population with any sportsbook spending in a quarter increases by 3.1 percentage points. The effects on average spending grow continually over time with no clear evidence of saturation, suggesting the market for mobile sports betting continues to mature years after legalization. At the same time, substantial betting activity occurs in counties where sports betting is not legal but which lie near a legal state, with spillover effects on total spending roughly 14% of the direct effect for counties within 15 miles of a legal state, declining monotonically with distance and approaching zero by 60 miles. These spillovers have real consequences for consumer financial health. Three years after legalization, median credit scores are one point lower and overall delinquency rates increase by 0.31 percentage points following legalization. [Under-40 auto loan delinquency increases by half a percentage point and credit card delinquency by one percentage point, driving the overall increase in delinquency.] Since only about 3.1% of the population takes up betting after legalization, these intent-to-treat estimates would imply that those who are induced to bet due to legalization experience delinquency increases of 10 percentage points.

Takeaways by Macro Roundup® AI

  1. State legalization of sports betting raises average quarterly betting spending per person by roughly $46 from a pre-treatment mean of $2.50 and lifts the share of the population with any sportsbook spending by 3.1 percentage points.
  2. Three years after legalization, median credit scores are one point lower and overall delinquency rates rise by 0.31 percentage points, with under-40 auto loan delinquency up half a percentage point and credit card delinquency up one percentage point.
  3. For counties within 15 miles of a legal state, spillover effects on total spending are roughly 14% of the direct effect, declining monotonically with distance and approaching zero by 60 miles.

Related Articles:

  • The Case for Prohibiting Vice — A record 62m Americans used marijuana in a single year, 17m of them daily or near daily, while half of American men now hold sports-betting accounts, up from almost zero seven years earlier. The author argues vice and addiction undermine citizens' capacity for free action, justifying state regulation beyond individual-harm criteria.
  • Americans Increasingly See Legal Sports Betting As A Bad Thing For Society and Sports — Survey data show 43% of U.S. adults say legalized sports betting is a bad thing for society, up from 34% three years earlier, and 40% say it is bad for sports, up from 33%. The largest shift came among men under 30, 47% of whom now call it bad for society versus 22% earlier.
  • From Sports to AI, America Is Awash in Speculative Fever. Washington Is Egging It On — Speculation now extends beyond stocks, bonds and property to crypto, valued at roughly $4tn, and sports betting, where Americans wagered $150bn in a year, up 24%, according to the American Gaming Association. Gold, traditionally a hedge against bubbles, itself looks bubbly, and working-class investors are flocking to these markets.

AI Summary. Online pornography is shifting from algorithmically curated tube sites, which still draw billions of monthly views, toward webcam and subscription platforms where creators with millions of social-media followers earn tens of millions of dollars from explicit livestreams. AI platforms now generate explicit videos, including realistic clips made from a single imported photograph.

David Sasaki American Institute for Boys and Men
Date Posted:

According to a 2022 survey, 54% of Americans had their first exposure to online pornography by the time they were 13. Americans now spend more on OnlyFans than on OpenAI and the New York Times combined.

How is online pornography shifting toward livestreams and AI-generated content?

Core argument: Pornography tube sites such as Pornhub and XVideos still draw billions of monthly views from algorithmically curated videos, but the landscape is shifting toward webcam and subscription platforms like Chaturbate and OnlyFans.

Five years ago, concerns about pornography centered on tube sites — Pornhub, XVideos, and their equivalents — where algorithmically curated videos to this day draw billions of monthly views. That landscape is rapidly changing. While scrolling through social feeds, young men are one tempting click away from an 18-year-old dancing naked in her bedroom on Chaturbate, OnlyFans, and dozens of other webcam sites. OnlyFans creators Sophie Rain and Anna Paul have millions of followers on TikTok, Instagram, and Snapchat — mostly young men, who collectively pay tens of millions of dollars to access their sexually explicit livestreams. AI has transformed pornography further still. Platforms like PornTubeAI are filled with a wide range of AI-generated videos, from deepfaked depictions of the “girl next door” to sexually explicit portrayals of recent news events. AI-powered nudification apps generate startlingly realistic, explicit video clips based on a single photograph. One of the most popular versions allows users to import photos directly from Instagram.

Takeaways by Macro Roundup® AI

  1. Pornography tube sites such as Pornhub and XVideos still draw billions of monthly views from algorithmically curated videos, but the landscape is shifting toward webcam and subscription platforms like Chaturbate and OnlyFans.
  2. OnlyFans creators Sophie Rain and Anna Paul have millions of TikTok, Instagram, and Snapchat followers, mostly young men, who collectively pay tens of millions of dollars for access to sexually explicit livestreams.
  3. AI platforms such as PornTubeAI host videos ranging from deepfaked "girl next door" depictions to explicit portrayals of recent news events, while nudification apps generate realistic explicit clips from a single photograph, with one popular version importing photos directly from Instagram.

Related Articles:

  • The Sex Recession: The Share Of Americans Having Regular Sex Keeps Dropping — General Social Survey data show the share of US adults ages 18–64 reporting weekly sex fell from 55% in 1990 to 37% by 2024. The decline extends to married adults across age groups, whose weekly rate fell from 59% to 49%.
  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • Bachelors Without Bachelor’s: Gender Gaps in Education and Declining Marriage Rates — Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men declined, with the overall decline in marriage driven almost entirely by fewer marriages between non-college women and non-college men. The education gap in women's marriage rates is larger in areas where non-college men face the highest joblessness and incarceration.

Monday, March 30, 2026

AI Summary. The author estimates the oil market needs to destroy at least 8m barrels a day of demand, more than the combined consumption of Germany, France, the UK, Italy, and Spain. Because the US, Canada, Europe, Japan, and China make up nearly 55% of use, the burden would fall on Africa, Latin America, and much of Asia.

Javier Blas Bloomberg
Date Posted:

Blas argues the drawdown of stocks and the use of bypass pipelines have absorbed ~60% of the oil supply loss to this point. Going forward, the market will clear via “demand destruction” of at least 8mm bpd, initially largely in emerging markets.

Which regions bear the burden of oil demand destruction?

Core argument: The author calculates the oil market needs to destroy at least 8 million barrels a day of demand, more than the combined consumption of Germany, France, the UK, Italy, and Spain.

If my math is right, the market needs to “destroy” demand by at least 8 million barrels a day or so. That’s more than the combined consumption of Germany, France, the UK, Italy, and Spain. Poorer nations will be priced out by richer ones or peers with the means to subsidise fuel prices and impose export bans. Look at the distribution of the oil market: The US, Canada, Europe, Japan, and China account for nearly 55% of consumption. That means six out of 10 barrels of global use are in places that usually have the wherewithal to pay up. Most of the initial demand destruction is going to happen elsewhere in places that simply can’t afford the prices. The burden will be firmly concentrated in Africa, Latin America, and much of Asia. Over the next few weeks, if the war continues, fuel pumps there will run dry and factories will close.

Takeaways by Macro Roundup® AI

  1. The author calculates the oil market needs to destroy at least 8 million barrels a day of demand, more than the combined consumption of Germany, France, the UK, Italy, and Spain.
  2. The US, Canada, Europe, Japan, and China account for nearly 55% of global oil consumption, meaning six out of 10 barrels are used in places that usually have the means to pay up.
  3. The author argues most initial demand destruction will be concentrated in Africa, Latin America, and much of Asia, where fuel pumps will run dry and factories will close if the war continues.

Related Articles:

  • Why This Jump in Gas Prices Feels Different — The U.S. average gasoline price rose by nearly $1 a gallon, from about $2.90 to $3.70, according to the Energy Information Administration — the second-largest four-week increase in at least 30 years, exceeded only by the jump after Hurricane Katrina. With the typical U.S. driver covering about 1,000 miles a month, that adds up to $50 monthly.
  • 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.
  • Hormuz Disruption May Impact Global Agriculture Prices — Disruption to fertilizer supplies could raise grain prices mainly by cutting grain output, through yield losses from delayed or sub-optimal nitrogen application and shifts toward less fertilizer-intensive crops; fertilizer accounts for about 20% of grain costs. Regions with later crop calendars, such as Europe and the Southern Hemisphere, are more exposed than the US.

AI Summary. Persian Gulf oil cargoes reach Asia in about 10–20 days, Europe and Africa in 20–35 days, and the US Gulf Coast in 35–45 days, so a supply disruption unfolds as a rolling shock moving westward. Asia feels the squeeze first, with Europe affected more by rising costs and competition than outright shortages.

Natasha Kaneva, Lyuba Savinova and Artem Fakhretdinov J.P. Morgan
Date Posted:

Global oil inventories fell 155mm barrels in the 1st 3 weeks of March, primarily due to a 211mm barrel drop in oil in transit. Onshore inventories have been largely stable, Asian deliveries from the Gulf will stop on ~ April 1 driving demand destruction.

How does an oil supply disruption spread across regions?

Core argument: Gulf cargoes reach Asia in roughly 10–20 days, Europe and Africa in about 20–35 days, and the US Gulf Coast in roughly 35–45 days, so the supply disruption rolls westward sequentially rather than striking all regions at once.

Voyage times set the clock: cargoes from the Gulf reach Asia in roughly 10-20 days, arriving first in India and later in Northeast Asia. Europe and Africa follow, with transit times of about 20-35 days, while the US Gulf Coast sits at the far end of the chain at roughly 35-45 days. Much like during COVID, the shock unfolds sequentially rather than simultaneously—a rolling supply disruption moving westward, dictated by shipping times and buffered unevenly by regional inventories. This means Asia—heavily reliant on Gulf crude and products—is already feeling the squeeze as pre-closure cargoes have largely dried up. Africa is next. Europe is likely to feel the impact by mid-April, as the last February loadings arrive without replacement, but the shock is shaped more by rising costs and competition with Asia than by outright shortages.

Takeaways by Macro Roundup® AI

  1. Gulf cargoes reach Asia in roughly 10–20 days, Europe and Africa in about 20–35 days, and the US Gulf Coast in roughly 35–45 days, so the supply disruption rolls westward sequentially rather than striking all regions at once.
  2. Asia, heavily reliant on Gulf crude and products, is already feeling the squeeze as pre-closure cargoes have largely dried up, with Africa next in line.
  3. Europe is likely to feel the impact by mid-April as the last February loadings arrive without replacement, with the shock shaped more by rising costs and competition with Asia than by outright shortages.

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.
  • Shattered Assumptions And The Energy Quandary — The author argues that energy, rather than fixed income, now serves as the true hedge to equity positions, pushing investors, companies and countries to review their energy allocations and policies. Chinese government bonds diversified equity risk when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.
  • 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.

AI Summary. The authors estimate that a slowdown in US health care spending reflects technology-associated changes in health and site of care (21% of the slowdown, double that in Medicare), more elastic long-run supply (6%), market changes reducing and making demand more elastic (11–27%), improved population health (7%), and slower price growth net of upcoding (24%).

David Cutler and Lev Klarnet Brookings Papers On Economic Activity
Date Posted:
Is Database:
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In 2024, medical spending as a share of GDP was just above its 2010 level and 15% ($977B) below its 2010 forecast; 21% of the gap was due to technology, 24% to price reductions, and 11–27% to reforms such as prior authorization and higher deductibles.

What explains the slowdown in US health care spending?

Core argument: Technology-associated changes in health and site of care account for 21% of the overall U.S. health care cost slowdown and double that share in Medicare, according to the authors' estimates.

Five factors are important in the slowdown in spending [Figure 16]. The first is technology-associated changes in health and site of care. These correspond to the subsequent innovations in our model. Together, technologies along these lines account for 21% of the overall cost slowdown and double that in Medicare. Second, long-run supply is more elastic than short-run supply, which lowers spending over time. This is particularly apparent in the impact of patent expiration for pharmaceuticals and in relative declines in imaging reimbursement. We estimate that greater long-run supply explains 6% of the spending slowdown. Third, a variety of market changes contribute to reduced and more elastic demand, including increased cost sharing paid by consumers, physicians not paid as much for using technologies, and insurers imposing restrictions on technology use - a rough guess is that these account for 11 to 27% of the spending slowdown. Fourth, the population is healthier in ways that reduce spending. This includes fewer hospitalizations for smoking-related conditions and reduced need for formal home health care. The birth rate has fallen as well, which reduces the need for care. We estimate improved population health explains 7% of the spending slowdown. A major component is slower price growth. Net of upcoding, we estimate lower price growth explains 24% of the spending slowdown.

Takeaways by Macro Roundup® AI

  1. Technology-associated changes in health and site of care account for 21% of the overall U.S. health care cost slowdown and double that share in Medicare, according to the authors' estimates.
  2. The authors estimate that slower price growth, net of upcoding, explains 24% of the health care spending slowdown, while market changes reducing demand — higher consumer cost sharing, lower physician payment for technology use, and insurer restrictions — account for a rough 11–27%.
  3. Improved population health explains an estimated 7% of the spending slowdown, through fewer smoking-related hospitalizations, reduced need for formal home health care, and a lower birth rate, while greater long-run supply elasticity explains 6%.

Related Articles:

  • Sick as a Dog — US healthcare stocks tracked technology-sector returns from 1989 to 2019 with lower volatility (15% vs 24%), but have since stagnated as technology advanced. Major pharmaceutical firms trade at forward price-to-earnings ratios of 8x–9x, biotech carries one of the market's largest valuation discounts, and 80% of biotech initial public offerings since 2018 have collapsed.
  • Saved by Medicaid: New Evidence on Health Insurance and Mortality from the Universe of Low-Income Adults — Using linked Census and tax records for 37m low-income adults, the authors estimate that state Medicaid expansions raised enrollment by 12 percentage points and cut mortality among low-income adults by 2.5%, implying a 21% reduction in the mortality hazard of new enrollees. They estimate direct budgetary costs of $5.4m per life saved and $179,000 per life-year saved.
  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.

AI Summary. Eight mega-cap technology companies — Microsoft, Nvidia, Google, Apple, Amazon, Meta, Tesla, and Oracle — account for 85% of the S&P 500's decline, subtracting roughly 576 index points, while the remaining ~490 companies collectively added about 100 points. Because of their outsized index weights, benchmark performance reflects a handful of firms rather than broad market breadth.

Paul Kedrosky Notes on Complexity
Date Posted:

The S&P 500 is down ~7% year to date with 85% of the losses due to Kedrosky’s “Hateful Eight,” the Mag 7 and Oracle.

How much of the S&P 500's decline comes from eight companies?

Core argument: The "Hateful Eight" — the Magnificent 7 plus Oracle — account for 85% of the S&P 500's year-to-date drawdown, subtracting roughly 576 points while the index overall is down 7%.

Year-to-date, the S&P 500 index is down 7%, but that headline hides record concentration. The “Hateful Eight” — the Mag 7 + Oracle that drove index gains for the past two years — account for 85% of the year-to-date drawdown, subtracting roughly 576 points. The other ~490 companies collectively added about 100 points. For most of the past cycle, indexes were driven by number of mega-cap tech stocks. Now that is all reversing, with the broad market overwhelmed by losses in a handful of stocks with outsized weights. As you can see in the cluster, the largest negative contributors are in the same cohort: Microsoft, Nvidia, Google, Apple, Amazon, Meta, Tesla, and Oracle. Their declines vary, but their index impact is large because of their huge weights. Meanwhile, many smaller index members are up year-to-date, but their contributions get washed away. When leadership is this concentrated, index behavior becomes a function of a few balance sheets, not underlying breadth. And then sentiment flips, in particular about AI capex and associated debt, as it has, everything goes into reverse.

Takeaways by Macro Roundup® AI

  1. The "Hateful Eight" — the Magnificent 7 plus Oracle — account for 85% of the S&P 500's year-to-date drawdown, subtracting roughly 576 points while the index overall is down 7%.
  2. The other roughly 490 S&P 500 companies collectively added about 100 points, with many smaller members up but their contributions washed away by mega-cap declines.
  3. Microsoft, Nvidia, Google, Apple, Amazon, Meta, Tesla, and Oracle are the largest negative contributors, and their index impact is large because of their huge weights even though their declines vary.

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AI Summary. An analysis of tens of thousands of responses on policy preferences and sociopolitical beliefs finds that widely used AI chatbots nudge users away from extreme positions toward more moderate, expert-aligned stances. The author estimates Grok guides conversations toward the centre-right, while OpenAI's GPT, Google's Gemini, and China's DeepSeek nudge toward a centre-left worldview.

John Burn-Murdoch  Financial Times
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John Burn-Murdoch finds that while social media amplifies fringe views, LLMs “nudge people away from the most extreme positions,” suggesting AI could be “technocratising,” in contrast to “social media’s radically democratising influence.”

Do AI chatbots nudge users toward moderate political views?

Core argument: Across tens of thousands of responses on policy preferences and sociopolitical beliefs, the author finds that the most widely used AI chatbots nudge users away from the most extreme positions toward more moderate, expert-aligned stances.

I used a dataset of tens of thousands of responses to questions on policy preferences and sociopolitical beliefs to test whether and how the most widely used AI chatbots shape conversations about politics and society. The results strongly support the theory of AI chatbots as depolarising and technocratising. While different AI platforms behave in subtly different ways, all of them nudge people away from the most extreme positions and towards more moderate and expert-aligned stances. On average, Grok guides conversations about policy and society towards the centre-right — a rightward push for most people but a moderating nudge towards the centre for those who start out as conservative hardliners. OpenAI’s GPT, Google’s Gemini, and the Chinese model DeepSeek all exert similarly sized nudges towards a centre-left worldview — a slight leftward nudge for most people but a moderating push away from fringe leftwing positions. These are only the results of one analysis, and it is also possible that usage patterns and the models themselves will evolve in ways that deviate from the patterns I found. But at the very least, there is cause for optimism that the next information revolution may take us in a less corrosive direction than the last.

Takeaways by Macro Roundup® AI

  1. Across tens of thousands of responses on policy preferences and sociopolitical beliefs, the author finds that the most widely used AI chatbots nudge users away from the most extreme positions toward more moderate, expert-aligned stances.
  2. Grok on average guides policy and society conversations toward the centre-right, pushing most users rightward while moderating those who begin as conservative hardliners toward the centre.
  3. OpenAI's GPT, Google's Gemini, and the Chinese model DeepSeek exert similarly sized nudges toward a centre-left worldview, slightly leftward for most users and away from fringe left-wing positions for others.

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