Edward Conard

Top Ten New York Times Bestselling Author

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

Macro Roundup


Monday, April 6, 2026

AI Summary. The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.

Owen Zidar and Eric Zwick The Everywhere Millionaire
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Zidar and Zwick find SCF data show ownership share in private businesses make up between 45–50% of top 0.1% American wealth, and ~80% of US households worth $30mm+ are business owners.

Does official wealth data overstate how much the ultrarich own public stocks?

Core argument: The Survey of Consumer Finances shows private business at roughly 45–50% of top 0.1% wealth, far more than the Federal Reserve's Distribution of Financial Accounts "private business" label implies.

“Private businesses” make up a declining and now-modest share of top 0.1% wealth in the Federal Reserve’s Distribution of Financial Accounts (DFA), with corporate equities dominating portfolios at the very top. The misleading implication is that the rich are primarily stockholders. In fact, they are not. The issue, we learned, is that the DFA’s “private business” category is much narrower than what most people mean by the term. It covers only proprietor’s equity in noncorporate businesses — partnerships and sole proprietorships. Not S-corporations. Not other private corporations. Not financial partnerships like private equity or hedge funds. Just noncorporate, nonfinancial businesses. Private corporations are valued separately, but the Fed can’t distinguish households’ holdings of private corporate equity from their holdings of publicly traded stocks. They’re all lumped together into “corporate equities.” The Survey of Consumer Finances (SCF) tells a different story about what the top 0.1% actually owns. Private business shows up as roughly 45 to 50% of top wealth — far larger than the DFA’s “private business” label suggests. About 80% of households worth $30 million or more are business owners.

Takeaways by Macro Roundup® AI

  1. The Survey of Consumer Finances shows private business at roughly 45–50% of top 0.1% wealth, far more than the Federal Reserve's Distribution of Financial Accounts "private business" label implies.
  2. The Distribution of Financial Accounts' "private business" category covers only proprietor's equity in noncorporate, nonfinancial partnerships and sole proprietorships, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships.
  3. The Federal Reserve cannot distinguish households' private corporate equity from publicly traded stocks, lumping both into "corporate equities," which makes the top 0.1% appear to be primarily stockholders.

Related Articles:

  • Top Wealth in America: New Estimates and Implications for Taxing the Rich — New estimates put the top 0.1%'s share of US wealth at 15%, up from 12.9% over a 15-year span, a smaller concentration than some earlier estimates but still leaving the top 1% holding nearly as much wealth as the bottom 90%. Pass-through business and public equity dominate top-end wealth, while pension and housing wealth dominate for the bottom 90%.
  • They’re Rich but Not Famous—and They’re Suddenly Everywhere — An analysis of Federal Reserve data estimates about 430,000 U.S. households are worth $30m or more, including roughly 74,000 worth at least $100m, with growth in the number of very rich households outpacing overall population growth over recent decades. Nearly 72% of the top 0.1%'s wealth consists of corporate equities, mutual fund shares, and private businesses.
  • Capitalists in the Twenty-First Century — Most income at the top of the US distribution is non-wage income, primarily profits from closely-held, mid-market firms in skill-intensive industries owned by working-age individuals. The authors find private business profit falls by three-quarters after an owner retires or dies prematurely, indicating most top earners are "working rich" deriving income from human capital.

AI Summary. A slowdown in U.S. wage growth stems entirely from a sharp deceleration in the "private education and health services" sector, which employs one in four private-payroll workers and has historically tracked economy-wide wage trends. The slowdown would imply wage growth is no longer running faster than the pre-pandemic norm, a benign signal for inflation.

Matt Klein The Overshoot
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The last six months saw US wages rise at their pre-pandemic rate of ~3% annually, down from the mid-2023 to mid-2025 rate of 4.1%, but the deceleration is primarily driven by near-zero wage growth in healthcare.

What is driving the slowdown in private-sector wage growth?

Core argument: The U.S. wage growth slowdown is entirely a function of a sharp deceleration within "private education and health services," a sector whose wage growth has, until now, tended to behave like the rest of the economy on average, unlike other industries.

The deceleration is notable for several reasons: It would imply that wage growth is no longer running faster than the pre pandemic-norm, which could have benign implications for the inflation outlook. It is an abrupt slowdown after years of stability, which could potentially reflect the lagged impact of job market weakening. It is entirely a function of a sharp slowdown within the “private education and health services” sector—which is odd, because, until now, wage growth in this category has tended to behave just like the rest of the economy, on average, which cannot be said for other industries. One in four workers on private payrolls are currently employed within the “private education and health services” sector, which corresponds to industries 61 and 62 within the North American Industry Classification System (NAICS). About two-thirds of those workers are in the healthcare sector (mostly hospitals, nursing homes, and physicians’ offices) and the remaining one-third are split roughly evenly between private education and “social assistance”, which includes child care. This has, historically, been the single sector of the economy that is most representative of underlying wage trends. [Further], the share of private employment in health and education has increased by more than 2pp since early 2023, which is unprecedented outside of a downturn.

Takeaways by Macro Roundup® AI

  1. The U.S. wage growth slowdown is entirely a function of a sharp deceleration within "private education and health services," a sector whose wage growth has, until now, tended to behave like the rest of the economy on average, unlike other industries.
  2. Private education and health services employs one in four private-payroll workers, with about two-thirds in healthcare — mostly hospitals, nursing homes, and physicians' offices — and the remaining third split roughly evenly between private education and social assistance, which includes child care.
  3. The share of private employment in health and education has risen by more than 2 percentage points since early 2023, a gain unprecedented outside of a downturn, and the wage deceleration would imply growth is no longer running faster than the pre-pandemic norm.

Related Articles:

  • The Fed is Misreading the Inflation Risks — 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.
  • Inflation Is Down, But Americans Still Feel an Affordability Squeeze — Average US weekly pay has risen 31% over six years, outpacing prices, but inflation erased most of those gains. Grocery prices are up about 30% since early 2020, a young married couple now needs 70% of annual household income for an average down payment versus 58% in 2019.
  • How Does Immigration Shape Average Labor Productivity? Evidence from the CPS — A worker-quality index built from US household survey data stayed within 1% of its starting level despite a shift toward more immigrant workers, while official nonfarm business productivity rose 8.2%. Lower predicted wages among Central American arrivals were offset by European and Asian immigrants, whose predicted wages exceed the US-born average by about 20%.

AI Summary. The US is not insulated from market effects of a Strait of Hormuz closure: while US natural gas prices have declined this year, most other hydrocarbon and refined product prices have risen materially, with US crude oil, wholesale gasoline, naphtha, shipping fuel and some petrochemical increases exceeding those in Europe and Asia.

Michael Cembalest J.P. Morgan
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US energy independence partially offset war effects. Natural gas prices have declined year to date, but jet fuel prices have risen by ~68% of the global increase, and price growth in US crude and wholesale gasoline exceeds the mean non-US increase.

Is the US insulated from global oil price shocks?

Core argument: US crude oil, wholesale gasoline, naphtha, shipping fuel and certain petrochemical prices have risen more this year than comparable prices in Europe and Asia, undercutting the notion that the US is insulated from a closure of the Strait of Hormuz.

The notion that the US is insulated from market consequences of the Strait of Hormuz being closed is mostly false. While US natural gas prices have actually declined this year, most other hydrocarbon-related fuels and refined product prices have increased materially. In some instances, US price increases are even higher than increases elsewhere in the world. For example: US crude oil, wholesale gasoline, naphtha, shipping fuel and certain petrochemical price increases this year are even higher than price increases in Europe and Asia. And even though the US is a net exporter of jet fuel, US jet fuel prices have risen by around two thirds of international increases.

Takeaways by Macro Roundup® AI

  1. US crude oil, wholesale gasoline, naphtha, shipping fuel and certain petrochemical prices have risen more this year than comparable prices in Europe and Asia, undercutting the notion that the US is insulated from a closure of the Strait of Hormuz.
  2. US jet fuel prices have risen by roughly two-thirds of the international increase even though the US is a net exporter of jet fuel.
  3. US natural gas prices have declined this year, while most other hydrocarbon-related fuels and refined product prices have increased materially.

Related Articles:

  • Oil Flash Note — 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.
  • The Oil Market Is Moving Into Demand Destruction Mode — 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.
  • 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. An analysis of country- and product-specific oil markets identifies pockets of potential extreme tightness if the Strait of Hormuz remains effectively closed, with critically low supplies of the petrochemical feedstocks naphtha and liquefied petroleum gas in Asia and cross-product scarcity in multiple Asian countries.

Yulia Zhestkova Grigsby, Alexandra Paulus and Daan Struyven Goldman Sachs
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A GS analysis finds Western Europe has ~109 days of crude and refined products stocks, relative to ~144 days in Japan and 70 days in ROK. Emerging markets in Asia and South Asia still have several weeks worth of stocks.

Does a blocked oil shipping route create petrochemical feedstock shortages in Asia?

Core argument: A country-product-specific analysis of oil markets identifies critically low supplies of the petrochemical feedstocks naphtha and LPG in Asia, with cross-product scarcity appearing in multiple Asian countries in April.

As the last tankers that crossed the Strait of Hormuz before the war are reaching their destination, concerns about potential oil shortages are rising. We analyze country-product-specific oil markets, identify pockets of potential extreme tightness, and discuss the potential evolution of near-term shortages if the Strait of Hormuz remains effectively closed for longer. Our three-way analysis highlights already critically low supplies of petrochemical feedstocks – naphtha and LPG – in Asia, with cross-product scarcity in multiple Asian countries in April.

Takeaways by Macro Roundup® AI

  1. A country-product-specific analysis of oil markets identifies critically low supplies of the petrochemical feedstocks naphtha and LPG in Asia, with cross-product scarcity appearing in multiple Asian countries in April.
  2. The last tankers that transited the Strait of Hormuz before the war are reaching their destinations, raising concerns about oil shortages if the Strait remains effectively closed for longer.
  3. The analysis identifies pockets of potential extreme tightness by country and product and discusses how near-term shortages could evolve under a prolonged closure of the Strait of Hormuz.

Related Articles:

  • The Global Wave Of Energy Rationing — The US Energy Information Administration reports that 83% of liquefied natural gas and 84% of crude oil shipped through the Strait of Hormuz was bound for Asia. Asian governments including Thailand, Vietnam, Indonesia, and Pakistan are urging fuel conservation through remote work, carpooling, cycling, and reduced air conditioning use.
  • Oil Flash Note — 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.
  • 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.

AI Summary. About two-thirds of US stockpiles of the stealthy JASSM missile family — including the extended-range version, which flies more than 600 miles to strike targets beyond enemy air defenses — have been committed to the conflict with Iran, though committing them does not mean all will be used.

Gerry Doyle Bloomberg
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The Iran War is depleting the US JASSM-ER cruise missile stock; over 1,000 have been used in the Iran campaign so far and Pacific inventories are being moved to CENTCOM, leaving only 425 out of a prewar inventory of ~2,300 for a China contingency.

Does committing most long-range missiles to one war create strategic vulnerability?

Core argument: About two-thirds of US stockpiles of the JASSM family — the JASSM-ER, which flies more than 600 miles, and the roughly 250-mile JASSM — have been committed to the Iran war, though that does not mean all will be used.

The JASSM-ER, or Joint Air-to-Surface Missile-Extended Range, can fly more than 600 miles and was designed to hit targets at safer distances to avoid an enemy’s air defenses. Along with the shorter-range JASSM — which has a range of about 250 miles, about two-thirds of US stockpiles have been committed to the Iran war. Lockheed Martin’s scheduled production rate for 2026 is 396 of the longer-range version, although as many as 860 can be manufactured if the line, which also produces the LRASM anti-ship missile, is fully geared toward JASSMs. Committing so many JASSM-ERs to the Iran war does not mean they will all be used.

Takeaways by Macro Roundup® AI

  1. About two-thirds of US stockpiles of the JASSM family — the JASSM-ER, which flies more than 600 miles, and the roughly 250-mile JASSM — have been committed to the Iran war, though that does not mean all will be used.
  2. Lockheed Martin's scheduled 2026 production rate for the longer-range JASSM-ER is 396 missiles, with as many as 860 possible if the line, which also builds the LRASM anti-ship missile, is fully geared toward JASSMs.
  3. The JASSM-ER, with a range exceeding 600 miles, was designed to strike targets from safer distances to avoid an enemy's air defenses.

Related Articles:

  • The First 36 Hours of War Consumed Over 3,000 U.S.-Israeli Munitions — 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.
  • U.S. Races to Accomplish Iran Mission Before Munitions Run Out — The Pentagon is working to maintain sufficient stocks of Thaad, Patriot, and Standard Missile interceptors being used to defend against Iranian missiles and drones, with Thaad systems deployed to Israel, Jordan, South Korea, and Guam. Patriots intercept lower-flying threats, while SM-3s can hit ballistic missiles above the atmosphere.
  • Japan, U.S. Form Working Group For Joint Missile Production — Japan and the United States agreed to create working groups on joint missile production, ship and aircraft repair, and supply chain resiliency as part of a defense industry cooperation forum. U.S. officials say Japan's engineering, industrial, and manufacturing capacity is a significant addition for the U.S. defense industrial base.

AI Summary. A large and rising share of China's economy operates under soft budget constraints, where firms retain access to credit regardless of balance sheets or profit expectations. Because nonproductive investment consuming more value than it creates can distort reported GDP, China's growth figures may diverge from underlying value creation more than in other large economies.

Michael Pettis China Financial Markets
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As China lacks “hard” budget constraints, continued access to credit ensures that value-reducing investment persists without the discipline of bankruptcy. Thus, Pettis argues, China’s GDP measures are inflated by “the deferral of lost recognition.”

Does reported growth measure real value creation without hard budget constraints?

Core argument: A large and rising share of China's economy operates under soft budget constraints, in which domestic economic entities can expect continued access to credit regardless of their balance sheets and profit expectations.

GDP [is intended to] measure the total monetary value of goods and services produced, but real value creation is hard to capture. A large and rising share of the Chinese economy instead operates under soft budget constraints. [That means] the relationship between reported GDP and the underlying economy can differ significantly compared to other large economies. What is a hard budget constraint? It is a disciplinary mechanism within capitalist economies that effectively prevents economic entities from consistently misusing resources. Economic entities operate under hard budget constraints when they must stay within strict loss parameters. They can only spend what they earn or borrow credibly, and if losses cannot be financed, they eventually go bankrupt. In China, however, where a large and rising share of the economy operates under soft budget constraints, many domestic economic entities can expect continued access to credit no matter what the condition of their balance sheets and profit expectations. Nonproductive investment—projects producing less value than the resources they consume—can distort GDP. [Thus] the GDP growth target in a soft-budget system can tell us more about the sustainability of the financial structure than it does about the creation of real economic value.

Takeaways by Macro Roundup® AI

  1. A large and rising share of China's economy operates under soft budget constraints, in which domestic economic entities can expect continued access to credit regardless of their balance sheets and profit expectations.
  2. Nonproductive investment—projects producing less value than the resources they consume—can distort GDP, so the relationship between reported GDP and the underlying economy in China can differ significantly from other large economies.
  3. In a soft-budget system, a GDP growth target can tell more about the sustainability of the financial structure than about the creation of real economic value.

Related Articles:

  • The Dangerous Triumph Of Neo-Mercantilism — Neo-mercantilism is thriving in both China, which pairs infant-industry promotion with large trade surpluses, and in a United States focused on external deficits and protecting domestic markets. The author argues this will likely fracture the world economy, and that a new multilateral treaty could include a mechanism to combat large structural trade surpluses.
  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
  • China’s Economy: Rightsizing 2025, Looking Ahead to 2026 — The authors argue China's official growth figures are inconsistent with ten consecutive quarters of deflation, estimating that real GDP is around 11% below official levels, with most of the adjustment in investment. That would imply a drop of roughly 9 percentage points in China's share of global investment, helping explain its export surge.

Tuesday, April 7, 2026

AI Summary. About half of the 1990s gap between American and European hours worked had reversed by the end of the 2010s. The authors estimate US hours per person declined after the 2000s because of rising benefits for the non-employed—especially health benefits like Medicaid—while non-US hours rose with higher wages and lower work costs.

Serdar Birinci, Loukas Karabarbounis, and Kurt See National Bureau of Economic Research
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Work hours of Americans and Europeans were ~ equal in the early 1970s, but by the mid 1990s, Europeans worked much less than Americans. Half of this hours gap had vanished by 2019. The drop in US hours was collinear with an ~ doubling of Medicaid enrollment.

Why has the gap in hours worked between Americans and others narrowed?

Core argument: About half of the U.S.–Europe gap in hours worked that opened by the 1990s had reversed by the end of the 2010s, with the convergence concentrated on the extensive margin and observed for both men and women.

Whereas Americans and Europeans were working roughly the same hours in the early 1970s, by the mid 1990s, Americans were working much more than Europeans. We update Prescott’s observations on hours worked for advanced economies and document that about half of the hours gap in the 1990s has reversed by the end of the 2010s. While the decline in the U.S. hours is well documented in the literature, the increase in non-U.S. hours in the past two decades, both relative to the United States and in absolute levels, has not yet been analyzed systematically. The convergence in hours worked is concentrated on the extensive margin and is observed for both men and women. We offer a comparative study on the convergence of hours worked and ask, “Why do Americans no longer work so much more than non-Americans?” [Employing both nonstructural correlation analysis and a structural model of labor supply, we suggest that] U.S. hours per person declined after the 2000s because of the rise of benefits provided to the non-employed. Among these benefits, we find the most important role for health benefits and, in particular, Medicaid. For non-U.S. countries, the rise of labor supply is generally accounted for by a rise of wages and falling fixed costs and disutility of work.

Takeaways by Macro Roundup® AI

  1. About half of the U.S.–Europe gap in hours worked that opened by the 1990s had reversed by the end of the 2010s, with the convergence concentrated on the extensive margin and observed for both men and women.
  2. The authors attribute the post-2000s decline in U.S. hours per person to the rise of benefits provided to the non-employed, assigning the most important role to health benefits and, in particular, Medicaid.
  3. Rising labor supply outside the United States is generally accounted for by higher wages and falling fixed costs and disutility of work, according to the authors' correlation analysis and structural model of labor supply.

Related Articles:

  • Hours Worked and Lifetime Earnings Inequality — US survey data show large differences in lifetime hours of work, and a calibrated model of labor supply and human capital accumulation implies that nearly 20% of the variance in lifetime earnings is accounted for by these differences, with 90% of that effect due to heterogeneity in preferences for work.
  • Comparing EU-to-US Output Per Hour — European Union output per hour worked has risen from about 72% of the US level in the early 2000s to about 82%. The EU's 28% shortfall in GDP per capita versus the US is roughly two-thirds attributable to lower output per hour and one-third to fewer hours worked; Germany's shortfall reflects fewer hours alone.
  • Europeans ‘Less Hard-Working’ Than Americans, Says Norway Oil Fund Boss — Norway's sovereign wealth fund argues that American companies are outpacing European rivals on innovation and technology because the US more readily accepts failure and risk and because Americans work harder and are more ambitious. US shares now make up almost half of the fund's equity holdings, up from 32% a decade earlier, while UK holdings fell from 15% to 6%.

AI Summary. The US, China, Germany, and Japan account for roughly two-thirds of global current account imbalances, with the US deficit at 4% of GDP financed by capital inflows into dollar assets. The average duration of a surplus or deficit spell roughly doubled since the 1980s, building large net foreign asset and liability positions.

IMF Staff International Monetary Fund
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As of 2024, the US, China, Germany, and Japan accounted for ~2/3 of total global imbalances (the sum of the absolute value of each economy’s current account deficit and surplus). The US CA deficit is between 0.8 and 1% of world GDP.

How persistent are global current account imbalances and which economies drive them?

Core argument: The US, China, Germany, and Japan together account for roughly two-thirds of global imbalances, with the US deficit equal to 4% of GDP in 2024, financed by capital inflows and portfolio investors seeking dollar assets.

Four economies—the US, China, Germany, and Japan—account for roughly two-thirds of global imbalances. The US deficit—equivalent to 4% of GDP as of 2024—has been financed by capital inflows and portfolio investors seeking dollar assets. Germany and Japan’s surpluses have been driven by high saving rates, joined by substantial surpluses in China beginning in the 2000s. Oil-exporting countries’ surpluses fluctuate with commodity prices, creating episodic contributions to global imbalances. In earlier decades, surpluses and deficits were more cyclical: countries moved in and out of surplus depending on business cycles, commodity shocks, and exchange rate movements. While there is no standard definition of persistence, the average duration of a deficit or surplus spell roughly doubled since the 1980s. Persistent surpluses over the past two decades have accumulated into very large net foreign asset positions for economies such as China, Germany, and Japan, with each holding net foreign assets equivalent to 3–3.5% of global GDP in 2024. Similarly, persistent deficits have built up into large net liability positions, most notably in the US where the NIIP stands at about -25% of global GDP in 2024, underscoring the central role of the US position in global balances (Figure 6).

Takeaways by Macro Roundup® AI

  1. The US, China, Germany, and Japan together account for roughly two-thirds of global imbalances, with the US deficit equal to 4% of GDP in 2024, financed by capital inflows and portfolio investors seeking dollar assets.
  2. The average duration of a deficit or surplus spell roughly doubled since the 1980s, when countries moved in and out of surplus with business cycles, commodity shocks, and exchange rate movements.
  3. China, Germany, and Japan each held net foreign assets equivalent to 3–3.5% of global GDP in 2024, while the US net international investment position stood at about -25% of global GDP.

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.
  • Debt, Deficits & Global Imbalances — Taxes or restrictions on short-term capital inflows were argued to be a more direct and potentially superior tool than tariffs for shrinking the trade deficit, since tariffs risk retaliation and supply-chain distortions. Proponents said such measures could reduce reliance on household and government borrowing to sustain employment, if paired with efforts to strengthen domestic demand and tradables capacity.
  • US Notches One of Its Biggest Annual Trade Gaps Since 1960 — The US goods and services trade deficit reached $901.5bn for the year, one of the largest in data going back to 1960. US companies increased imports of computers and accessories by nearly $145bn from the prior year, an acceleration in demand that reflects large-scale artificial intelligence investment.

AI Summary. Using occupation-level federal labor data, the authors estimate that employment growth among computer programmers — an occupation heavily exposed to artificial intelligence — has been 3% lower since the release of ChatGPT, after controlling for industry-level shocks. They note this may reflect reallocation of tasks across occupations.

Leland Crane and Paul Soto Federal Reserve Board
Date Posted:

Controlling for industry-level shocks, coder employment growth is about 3pp lower than it was prior to the release of ChatGPT in November 2022.

Is AI displacing programmers rather than augmenting their work?

Core argument: Computer programmer employment growth has been 3% lower since ChatGPT's November 2022 release, after controlling for industry-level shocks, according to the authors' analysis of O*NET and CPS occupation-level data.

This paper leverages occupation level data from O*NET and the CPS to measure the impact of ChatGPT’s release in November 2022 on employment in computer programming, an occupation heavily exposed to AI. We find robust evidence that coder employment growth fell after that release. After controlling for industry-level shocks we find that coder employment growth has been 3% lower since the introduction of ChatGPT. This may reflect reallocation of tasks across occupations and we cannot control for all the relevant factors. Nonetheless, it suggests that AI is having a significant impact on this group of workers.

Takeaways by Macro Roundup® AI

  1. Computer programmer employment growth has been 3% lower since ChatGPT's November 2022 release, after controlling for industry-level shocks, according to the authors' analysis of O*NET and CPS occupation-level data.
  2. The authors find robust evidence that coder employment growth fell following ChatGPT's introduction, in an occupation they identify as heavily exposed to AI.
  3. The authors note the estimated decline may reflect reallocation of tasks across occupations and that they cannot control for all relevant factors, while arguing it suggests AI is having a significant impact on coders.

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.
  • AI and the Fable of the ATMs — Bank tellers per branch fell steadily as automated teller machines spread, and total teller employment held up only because banking deregulation drove a rise in branch numbers; teller jobs are down nearly 40% from their peak. The author argues invoking this case for AI requires identifying an equivalent offsetting source of labor demand.
  • 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 Summary. The widely cited estimate that the top 10% of US earners account for 45% of consumer spending comes from a method combining Federal Reserve survey and financial-accounts data. Its author says he is more confident in the trajectory—a significant, consistent rise in the top 10% and 20% shares over 30–35 years—than the level.

Justin Fox Bloomberg
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Moody’s claim that the top 10% of Americans by income drove 45.8% of consumer spending in 2025 may be overstated. After taxes, the income share of the top 10% is only ~30–37%. But top earners also had big wealth gains, and “wealth effects are important.”

Has consumer spending grown more concentrated among top earners?

Core argument: Mark Zandi says he would not "die on the hill" of the estimate that the top 10% account for 45% of US consumer spending, but would fight hard that the top 10% and top 20% shares have risen significantly and consistently over the past 30–35 years.

“I feel more confident in the historical trajectory than I do in the actual levels,” said Mark Zandi, keeper of the spreadsheet that churns out its quarterly consumer spending estimates. “I wouldn’t die on the hill of the top 10% accounting for 45% of the spending, but I would fight hard that the share that’s going to folks in the top 10%, top 20% has risen significantly and consistently over the past 30, 35 years.” The method Zandi uses to estimate consumer spending combines data on asset holdings by income from the Federal Reserve’s triennial Survey of Consumer Finances with data on asset flows from its quarterly Financial Accounts of the US. The idea to merge the two originally came from then Fed Chairman Alan Greenspan in the late 1990s.“My understanding is he actually sketched it out on a napkin on an airplane flight,” said economist Dean Maki, who along with his Fed colleague Michael Palumbo was charged with making Greenspan’s idea operational and using it, in 2001, to estimate the “wealth effect” on consumer spending during the 1990s stock market boom. “One thing I learned from doing that research back when I was at the Fed was that wealth effects are important,” said Maki, now chief economist at asset manager Point72. “They were an important driver of consumer spending then and they still are today.”

Takeaways by Macro Roundup® AI

  1. Mark Zandi says he would not "die on the hill" of the estimate that the top 10% account for 45% of US consumer spending, but would fight hard that the top 10% and top 20% shares have risen significantly and consistently over the past 30–35 years.
  2. Zandi's consumer spending estimates combine asset holdings by income from the Federal Reserve's triennial Survey of Consumer Finances with asset flow data from its quarterly Financial Accounts of the US, an approach originally proposed by then-Fed Chairman Alan Greenspan in the late 1990s.
  3. Dean Maki, who with Fed colleague Michael Palumbo operationalized Greenspan's idea in 2001 to estimate the wealth effect during the 1990s stock market boom, says wealth effects were an important driver of consumer spending then and remain so today.

Related Articles:

  • Top 10% of Earners Drive a Growing Share of US Consumer Spending — An analysis of Federal Reserve data found the top 10% of US earners accounted for 49.2% of total consumer spending, up from 48.5% the prior quarter and the highest share in data going back to 1989. Spending by the bottom 80%, those making under roughly $175,000, has merely kept pace with inflation.
  • K-Shaped Economy? — Available spending data does not support the narrative of a bifurcated "K-shaped" consumer economy: surveys show households earning under $50,000 reported spending growth of 5%, versus 4.6% for those earning over $100,000. Government data show the top income decile's share of aggregate spending at 22.8%, down from 23.4% a year earlier.
  • What’s Missing in the Fed’s Data about Ultrarich Portfolios — The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.

AI Summary. The Starship heavy-lift rocket would make it possible to pre-position conventional munitions in low Earth orbit, with heat shields and inertial guidance, that could be deorbited with little warning to strike anywhere on Earth within minutes. Such a system would allow thousands of simultaneous precise strikes without aircraft or personnel at risk, removing the need to first establish air superiority.

Michael Hochberg Wall Street Journal
Date Posted:

Michael Hochberg estimates pre-positioning conventional weapons in orbit will become cost-effective at ~$100 a kilogram, which Starship Heavy could deliver. Currently, the cheapest launch platform is Falcon Heavy at ~$1,500 a kilogram.

Can orbiting weapons strike thousands of targets within minutes?

Core argument: Starship would allow the U.S. to pre-position conventional munitions in low Earth orbit with ablation shields and inertial guidance systems, enabling strikes anywhere on Earth within minutes.

Starship will make it possible to use low Earth orbit as a parking lot for a giant space-based arsenal. This would allow the U.S. to pre-position conventional munitions with ablation shields and inertial guidance systems to strike anywhere on Earth within minutes. New kinds of strikes would become feasible. Imagine a strike package of thousands of 200-pound bombs, each landing precisely, at the same time, on electric grid sites, government buildings, railway crossings, border stations and road intersections—without putting planes or military personnel at risk. This wouldn’t be limited by the number of available missile launchers or by the need for multiple sorties by strike aircraft. Such a system would obviate the need to establish air superiority before bringing in bombers and the need for large numbers of expensive cruise missiles. From an appropriately chosen low Earth orbit, munitions could be deorbited with very little warning.

Takeaways by Macro Roundup® AI

  1. Starship would allow the U.S. to pre-position conventional munitions in low Earth orbit with ablation shields and inertial guidance systems, enabling strikes anywhere on Earth within minutes.
  2. A strike package of thousands of 200-pound bombs could hit electric grid sites, government buildings, railway crossings, border stations and road intersections precisely and at the same time, without risking planes or military personnel.
  3. Orbital munitions would not be limited by the number of available missile launchers or by repeated strike-aircraft sorties, and would obviate the need to establish air superiority before bringing in bombers or to field large numbers of expensive cruise missiles.

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  • Has Starlink Already Won the New Space Race? — Starlink has launched more than 8,417 satellites, 39% of all satellites launched since the first artificial satellite reached orbit, and its roughly 7,300 operational satellites make up almost two-thirds of all operational spacecraft. It delivers low-latency broadband to over 5mn customers in 125 countries and is projected to generate $12bn in revenue and $2bn in free cash flow this year.
  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.