Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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 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
  • “…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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a 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 should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, April 28, 2026

AI Summary. The authors estimate that billionaire departures tied to a proposed California wealth tax would cut state income, sales, and other tax collections by $3.53bn–$4.49bn a year, with a $2.77bn lower bound based only on the nine publicly identified emigres. The analysis classifies 212 California billionaires by wealth source, assuming departures retain different shares of California-source income.

Jared Walczak California Tax Foundation
Date Posted:
Is Database:
Database

Walczak estimates the 2026 California Billionaire Tax Act would reduce annual state tax revenues by ~$3.53B to $4.49B due to billionaire departures and associated spillovers. The NPV of these ongoing losses would be several times the wealth tax revenue.

How much state tax revenue would billionaire departures cost annually?

Core argument: The authors estimate the 2026 California Billionaire Tax Act would cut state income, sales, and other tax collections by $3.53 billion to $4.49 billion per year under their primary billionaire-departure scenarios.

This paper estimates ongoing annual reductions in state tax revenue under scenarios based on announced and anticipated billionaire departures. The analysis considers direct impacts on individual income and, to a much lesser extent, sales tax collections, along with spillover effects. We identify 212 California billionaires using the Forbes billionaire list and classify each based on whether their wealth is primarily held in publicly traded equity, a privately held operating business, financial fund management, or a diversified mix of sources. We use classification-specific assumptions of income loss subject to a given billionaire’s departure, assuming that only 5% of public founders’ income will remain California source after a departure, compared to 55 percent for private operating business owners, 35% for financial management, and 15% for diversified wealth. Under our primary scenarios, the wealth tax yields ongoing reductions of $3.53 billion to $4.49 billion per year in income, sales, and other tax collections. Calculations based exclusively on the nine publicly identified billionaire emigres yield $2.77 billion in recurring revenue loss and can be regarded as a lower bound. Actual out-migration almost certainly already exceeds that which has been publicly reported, and continued departures should be expected should the initiative advance.

Takeaways by Macro Roundup® AI

  1. The authors estimate the 2026 California Billionaire Tax Act would cut state income, sales, and other tax collections by $3.53 billion to $4.49 billion per year under their primary billionaire-departure scenarios.
  2. Limiting the calculation to the nine publicly identified billionaire emigres yields $2.77 billion in recurring revenue loss, which the authors regard as a lower bound.
  3. The analysis classifies 212 California billionaires from the Forbes billionaire list and assumes post-departure California-source income of 5% for public founders, 55% for private operating business owners, 35% for financial management, and 15% for diversified wealth.

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.
  • 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.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. The United Arab Emirates is leaving the OPEC oil cartel in order to produce more crude, against Saudi Arabia's interests. Already pumping about 3.7m barrels a day, above its official OPEC ceiling, the country has capacity closer to 4.5m and aims to deliver 5m, output that would help cap prices.

Javier Blas Bloomberg
Date Posted:

Before the war, the UAE was producing ~3.7mm bpd, less than its 4.5mm bpd capacity due to OPEC constraints. It will likely have the ability to deliver 5mm bpd by the end of 2027. Once the war is over, the new output will “put a lid on prices.”

Does leaving OPEC let a member pump more and cap prices?

Core argument: The UAE was pumping about 3.7 million barrels a day of crude before the war, above its official OPEC ceiling, with capacity closer to 4.5 million and a target of 5 million by the end of 2027.

Make no mistake: UAE is leaving OPEC to produce more crude — against Saudi Arabia’s interests. Abu Dhabi was careful to avoid spooking the energy market, promising “to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions.” But it’s clear that UAE output is only headed one way: upwards. Before the war, the country was already pumping well above its OPEC official ceiling, producing about 3.7 million barrels a day of crude. It has the capacity to produce probably closer to 4.5 million barrels, and aims to be able to deliver 5 million by the end of 2027. More UAE oil is exactly what the market will need later this year when — because it’s a question of when and how, rather than if — the Strait of Hormuz reopens. When the conflict is over, Abu Dhabi, free from the OPEC constraint, [will be] able to pump at will, providing the world with the barrels needed to rebuild [inventories], in effect putting a lid on prices.

Takeaways by Macro Roundup® AI

  1. The UAE was pumping about 3.7 million barrels a day of crude before the war, above its official OPEC ceiling, with capacity closer to 4.5 million and a target of 5 million by the end of 2027.
  2. The UAE is leaving OPEC to produce more crude, against Saudi Arabia's interests, while pledging to bring additional production to market "in a gradual and measured manner, aligned with demand and market conditions.".
  3. Free from the OPEC constraint once the conflict ends and the Strait of Hormuz reopens, Abu Dhabi would be able to pump at will, supplying barrels to rebuild inventories and putting a lid on prices.

Related Articles:

  • How Fast Can Gulf Production Recover After Reopening? — Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited reported physical damage to oil fields and the likelihood that Saudi Arabia and the United Arab Emirates deploy spare capacity. Full recovery could take several quarters.
  • 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.
  • Petrodollars. Myths and Reality — Saudi Arabia's balance of payments breakeven exceeds $90 a barrel on about 7m barrels a day of exports, so oil near $100 would not generate a large Saudi surplus. Each $10 rise in oil prices adds roughly $160bn to the import bills of Europe and South and East Asian importers.

AI Summary. OpenAI missed internal targets for reaching 1bn weekly active ChatGPT users and for annual ChatGPT revenue, according to people familiar with the goals, as Google's Gemini grew and took market share. The company has also missed monthly revenue targets and struggled with subscriber defection after losing ground to Anthropic in coding and enterprise markets.

Berber Jin Wall Street Journal
Date Posted:

OpenAI has missed internal targets for new users and revenue. Citing people familiar with the matter, the WSJ reports CFO Sarah Friar is “worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough.”

Is competition eroding the leading AI company's revenue and user growth?

Core argument: OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year and has not announced the milestone, unnerving some investors, according to people familiar with the goals.

OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year, according to people familiar with the goals. The company still hasn’t announced that milestone, unnerving some investors. It also missed its yearly revenue target for ChatGPT as well after Google’s Gemini saw massive growth late last year and ate into OpenAI’s market share, the people said. The company has also struggled with defection rates among subscribers, according to people familiar with those figures. OpenAI missed multiple monthly revenue targets earlier this year after losing ground to Anthropic in the coding and enterprise markets, people familiar with its finances said.

Takeaways by Macro Roundup® AI

  1. OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year and has not announced the milestone, unnerving some investors, according to people familiar with the goals.
  2. OpenAI missed its yearly revenue target for ChatGPT after Google's Gemini grew sharply late last year and ate into OpenAI's market share, according to people familiar with the goals.
  3. OpenAI missed multiple monthly revenue targets earlier this year after losing ground to Anthropic in the coding and enterprise markets, according to people familiar with its finances, and has struggled with subscriber defection rates.

Related Articles:

  • We’re Using So Much AI That Computing Firepower Is Running Out — Surging AI demand is straining computing capacity: Anthropic's Claude programming interface recorded 98.95% uptime over a 90-day span, below the 99.99% software companies typically promise, as its annualized revenue run rate climbed from $9bn to $14bn to $30bn. The company has capped how much usage customers can consume during weekday peak morning hours.
  • Everyone’s Looking For A Bubble. No One Sees The Stampede — A proprietary model estimates monthly artificial intelligence revenue grew roughly 18-fold in two years, from $772m to $13.8bn, with AI accounting for an estimated 23% of Google Cloud, 10% of Azure and 5% of Amazon Web Services. The model's ratio of investment to revenue fell from 6.1x to 4.7x, still historically high.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.

AI Summary. Large gains in software productivity since the 1990s coincided with rising rather than falling web development employment, because demand for software grew faster than the labour needed per unit of output. Similar patterns appear in accounting, architecture, advertising, and high-tech healthcare specialisms such as lab testing and diagnostic imaging.

John Burn-Murdoch Financial Times
Date Posted:
Is Database:
Database

John Burn-Murdoch argues that it is likely that the elasticity of demand for AI-derived services will be sufficiently high to support increased employment in many AI-impacted sectors, an example of “Jevon’s Paradox.”

Does cheaper AI-driven production raise employment instead of cutting it?

Core argument: Large increases in software productivity since the 1990s coincided with rising employment in web development, as the explosion in demand for software outstripped the reduction in labour needed per unit of code.

An often overlooked question is whether there is such pent-up demand for a product or service that, when it becomes cheaper and more abundant, consumption rises at an even faster pace. Large increases in software productivity since the 1990s were accompanied by rising, not falling, employment in web development: the explosion in demand for software far outstripped the reduction in the amount of labour required for a given amount of code production. It has been a comparable but less dramatic story for most professional services. Software has made accountants, architects, and advertising creatives more productive, but larger rises in appetite for their services mean employment has also risen. High-tech pockets of healthcare show a similar pattern, with innovations — now including AI — producing dramatic efficiency gains in lab testing and diagnostic imaging, all while employment in these specialisms continues to rise as the population takes advantage of more and better healthcare.

Takeaways by Macro Roundup® AI

  1. Large increases in software productivity since the 1990s coincided with rising employment in web development, as the explosion in demand for software outstripped the reduction in labour needed per unit of code.
  2. Software has made accountants, architects, and advertising creatives more productive, yet larger rises in appetite for their services mean employment in those professional services has also risen.
  3. High-tech healthcare specialisms such as lab testing and diagnostic imaging show dramatic efficiency gains from innovations including AI while employment continues to rise as the population takes advantage of more and better healthcare.

Related Articles:

  • 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.
  • Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent — 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.
  • 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 Summary. China's Ministry of State Security attributes youth disillusionment to ideological infiltration by foreign anti-China hostile forces, calling young people the primary targets of such efforts. Millions of young Chinese have embraced a "lying flat" mindset, rejecting pressure to overwork or leaving work entirely in an economy with limited well-paying jobs.

Hannah Miao Wall Street Journal
Date Posted:

China’s Ministry of State Security is arguing that an anti-work mindset increasingly common among the young is being driven by “foreign anti-China hostile forces,” who are carrying out a “lying-flat brainwashing” campaign.

Is China blaming foreign influence for its youth opting out of work?

Core argument: China's Ministry of State Security blamed "foreign anti-China hostile forces" for ideological infiltration targeting young people, saying in a WeChat post that the youth represent the future of the nation.

For the past several years, millions of disenchanted young people in China have embraced a mindset dubbed “lying flat.” In an economy with limited well-paying jobs, many have rejected societal pressures to overwork or have stopped working completely. [MSS] the country’s intelligence agency blamed anti-China influences from abroad for stoking youth disillusionment. “The youth represent the future of the nation and are the primary targets for ideological infiltration by foreign anti-China hostile forces,” the Ministry of State Security said in a post published on WeChat, a multipurpose Chinese social media platform.

Takeaways by Macro Roundup® AI

  1. China's Ministry of State Security blamed "foreign anti-China hostile forces" for ideological infiltration targeting young people, saying in a WeChat post that the youth represent the future of the nation.
  2. Millions of disenchanted young people in China have embraced a mindset dubbed "lying flat," rejecting societal pressures to overwork or stopping work completely.
  3. China's economy offers limited well-paying jobs, and the Ministry of State Security attributes youth disillusionment to anti-China influences from abroad.

Related Articles:

  • China’s Youth Unemployment Hits New High As Fresh Graduates Flood Market — China's National Bureau of Statistics reported the jobless rate for 16-to-24-year-olds, excluding students, rose to 16.9% from 16.1%, while the rate for those aged 25 to 29 rose to 7.7% from 7.2%, and overall urban unemployment edged up to 5.4%. A record 12.7m students, about 4% more than the prior year, are expected to graduate.
  • China Punishes ‘Excessively Pessimistic’ Social Media Users — China's internet regulator has launched a campaign to remove online content that incites "excessively pessimistic sentiment," panic, or defeatist ideas such as "hard work is useless." Authorities have punished bloggers who advocated working less, an influencer who said forgoing marriage and children made financial sense, and a commentator who said China's quality of life lags Western countries.
  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.

AI Summary. Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with steeper declines in the five eastern states than in western Germany. Its statistical office projects the population will shrink about 5% by 2050 and that one in four inhabitants will be 67 or older by 2035.

Olaf Storbeck Financial Times
Date Posted:

German births hit a record low of ~654,000 in 2025; the delta btw deaths and births widened to ~352,000, a postwar record. The fall in births is more pronounced in the former East Germany.

Is Germany's falling birth rate shrinking and aging its population?

Core argument: Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with the decline steeper in the five eastern states at 4.5% last year versus 3.2% in western Germany.

Germany has one of the bleakest demographics in Europe, with its population expected to shrink about 5% by 2050 compared with 2025. By 2035, one in four inhabitants in Germany will be aged 67 or older, according to modelling by the statistical office. The current cohort of 30 to 39-year-olds is smaller than in previous years due to the decline in birth rates after German reunification in 1990, which resulted in a rise in unemployment in eastern Germany. The number of babies born per woman has fallen over the past four years and is back at an all-time low of 1.35. The fall in birth rates is more pronounced in the five eastern German states, with a decline of 4.5% last year compared with 3.2% in western Germany.

Takeaways by Macro Roundup® AI

  1. Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with the decline steeper in the five eastern states at 4.5% last year versus 3.2% in western Germany.
  2. Germany's population is expected to shrink about 5% by 2050 compared with 2025, and by 2035 one in four inhabitants will be aged 67 or older, according to modelling by the statistical office.
  3. Germany's cohort of 30 to 39-year-olds is smaller than in previous years because birth rates declined after the 1990 reunification, which resulted in a rise in unemployment in eastern Germany.

Related Articles:

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • The Demographic Future of Humanity: Facts and Consequences — The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
  • The Fight to Revive Europe’s Shrinking Rural Areas — The estimated population of predominantly rural European Union regions fell by nearly 8mn, or 8.3%, over a decade while urban population rose by more than 10mn, or 6%. Regions covering about 40% of the EU's land area and holding almost one-third of its population are seeing sustained resident declines.

Wednesday, April 29, 2026

AI Summary. The authors estimate that exposure to negative local labor market shocks after age 50 is followed by substantial declines in cognitive test scores, with effects concentrated among men aged 51 to 64. Cognitive scores of people in the weakest-employment-growth local areas diverge from those elsewhere, reaching a one-point gap on a 28-point scale by their 70s.

Noah Arman Kouchekinia, David Neumark and Tim Bruckner National Bureau of Economic Research
Date Posted:

Kouchekinia et al find men aged 51–64 in the 1996 – 2018 waves of the Health and Retirement Study who leave employment due to exogenous shocks in local labor demand experience more rapid cognitive decline than those who continue working.

Does weak local employment growth accelerate cognitive decline after 50?

Core argument: Respondents in commuting zones in the bottom quartile of employment growth score a full point lower on the 28-point Langa-Weir cognitive scale in their 70s than those in the top quartile, despite starting their early 50s at the same level.

There are marked differences in both level and trajectory [of cognitive scores] by economic geography, displayed in Figure 3, Panel C. Respondents in the commuting zones (CZs) in the lowest quartile of employment growth start their early 50s with scores at the same level as the other three quartiles. However, a gap emerges over time, particularly as respondents enter potential retirement years. Relative to the top quartile, there is a full one-point gap [in the Langa-Weig 28 point scale] for participants in their 70s between the bottom and top quartiles of CZ employment growth. This suggests a role for work – related to local variation in employment – in slowing cognitive decline. Our main IV specification, using a Bartik shift-share instrument for employment changes, finds substantial declines over time in cognitive scores following exposure to negative labor market shocks, focusing on pre-retirement ages above 50 [Table 1 in gallery]. Our IV findings of beneficial effects of employment on forestalling cognitive decline are concentrated among men aged 51 to 64, which coheres with the notion that employment in this subgroup (compared to women or persons of retirement age) would respond most strongly to local area labor market shocks. Our evidence extends past work focusing narrowly on the retirement age window and provides further support to the notion that working to older ages may delay age-related cognitive decline.

Takeaways by Macro Roundup® AI

  1. Respondents in commuting zones in the bottom quartile of employment growth score a full point lower on the 28-point Langa-Weir cognitive scale in their 70s than those in the top quartile, despite starting their early 50s at the same level.
  2. Using a Bartik shift-share instrument for local employment changes, the authors find substantial declines over time in cognitive scores following exposure to negative labor market shocks among people above age 50.
  3. The authors' instrumental-variable findings of beneficial employment effects on forestalling cognitive decline are concentrated among men aged 51 to 64, the subgroup whose employment would be expected to respond most strongly to local labor market shocks.

Related Articles:

  • The Path to 2075 — The Positive Story of Global Aging — Extending working lives is the most effective way to offset population aging's impact on dependency ratios, and the trend is already underway: in developed economies median effective working life has risen 12% (34 to 38 years) versus a 5% gain in life expectancy, with employment's share of population up from 46.0% to 48.3%.
  • Workforce Participation for Older Americans: Warning Lights Flashing — Labor force participation for Americans 55 and older remains almost two percentage points below pre-pandemic levels, while participation for youth, prime-age women, and prime-age men has recovered or exceeded earlier levels. Participation among 55–64 year-olds in the US has been overtaken by the OECD average and Europe.
  • The Age Divide in the American Workplace — American workers over 50 earned roughly 35% more per week than workers under 30 in the late 1970s, a gap that widened to about 55% at its early-2010s peak before narrowing to 47%. Their advantage in access to top-quarter-paying management jobs also widened, from about 5 to 8.3 percentage points.

AI Summary. Despite predictions a decade ago that AI would replace radiologists, radiologists earn more than $500,000 a year and their employment continues to grow. Reading scans is a task rather than a job, and cheaper task performance can increase demand for the job.

Torsten Sløk Apollo
Date Posted:

Sløk notes an example of “Jevons paradox.” As AI diffused through radiology, employment is up ~17%, and (nominal) compensation has grown 57%. “Reading scans is a task, not a job, and when the task gets cheaper, demand for the job grows.”

Does automating a task increase demand for the workers doing it?

Core argument: Radiologists earn more than $500,000 per year and their employment continues to grow, a decade after AI was expected to replace them.

A decade ago, AI was supposed to replace radiologists. Today, radiologists make more than $500,000 per year, and their employment continues to grow. Reading scans is a task, not a job, and when the task gets cheaper, the demand for the job grows.

Takeaways by Macro Roundup® AI

  1. Radiologists earn more than $500,000 per year and their employment continues to grow, a decade after AI was expected to replace them.
  2. Reading scans is a task rather than a job, and when the task becomes cheaper, demand for the radiologist job grows.

Related Articles:

  • What The AI ‘Jobpocalypse’ Narrative Misses — Large gains in software productivity since the 1990s coincided with rising rather than falling web development employment, because demand for software grew faster than the labour needed per unit of output. Similar patterns appear in accounting, architecture, advertising, and high-tech healthcare specialisms such as lab testing and diagnostic imaging.
  • 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.
  • 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 Summary. Iran pumps about 3m barrels a day of crude plus 750,000 barrels of condensate against domestic demand near 1.9m barrels, leaving a surplus of roughly 1.85m barrels a day that a blockade is pushing into storage. Commodity-intelligence firm Kpler estimates Iran has 12–22 days of storage capacity remaining.

Javier Blas Bloomberg
Date Posted:

Given storage constraints, Iran will need to close wells and halve its oil production from pre-war levels in mid-May. However, Iran was able to restart production after shutdowns driven by the “maximum pressure” campaign without “permanent damage.”

How long can oil storage absorb a blockaded exporter's surplus crude?

Core argument: Iran pumped about 3m barrels a day of crude plus 750,000 barrels of condensate before the war, and with local demand near 1.9m barrels, roughly 1.85m barrels a day of surplus is flowing into storage under the blockade.

Before the war started, Iran was pumping about 3 million barrels a day of crude, plus another 750,000 barrels of a light oil called condensate. With local demand running close to 1.9 million barrels, that leaves Iran with a daily surplus of about 1.85 million barrels a day. With the blockade in place, those barrels are heading into storage. Helpfully for the Islamic Republic, it has more onshore and offshore capacity than most of its neighbours, giving it time before its tanks are full. Kpler, a commodity-intelligence firm, reckons that Iran probably has another 12 to 22 days of storage available, far more than the US administration anticipated when it started the blockade. Back in 2019-2020, during the first Trump administration, Iran had to cut production significantly but was able to restart its wells without significant problems over the next few months, eventually lifting total petroleum output in 2025 to a 46-year high.

Takeaways by Macro Roundup® AI

  1. Iran pumped about 3m barrels a day of crude plus 750,000 barrels of condensate before the war, and with local demand near 1.9m barrels, roughly 1.85m barrels a day of surplus is flowing into storage under the blockade.
  2. Kpler, a commodity-intelligence firm, reckons Iran has another 12 to 22 days of storage available, more than the US administration anticipated when it began the blockade, aided by onshore and offshore capacity exceeding most of its neighbours.
  3. Iran cut production significantly in 2019-2020 during the first Trump administration but restarted its wells without significant problems over the following months, eventually lifting total petroleum output in 2025 to a 46-year high.

Related Articles:

  • The Hormuz Blockade Is as Much About China as Iran — The author estimates Iran earned about $100m a day from crude sales before the war and roughly $175m a day afterward, so a US-enforced blockade would deal its economy a heavy blow. An earlier US maximum-pressure sanctions campaign cut Iranian crude earnings to no more than $10m a day without forcing Iran to yield.
  • How Fast Can Gulf Production Recover After Reopening? — Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited reported physical damage to oil fields and the likelihood that Saudi Arabia and the United Arab Emirates deploy spare capacity. Full recovery could take several quarters.
  • 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. Chinese automakers BYD, Geely, and Great Wall Motor rank among the world's largest and have gained market share in Europe and Asia, with Chinese vehicles making up a quarter of sales in Mexico. US federal rules let Mexican residents and dual citizens drive noncompliant Chinese cars across the border, and Canada will allow imports of inexpensive Chinese electric vehicles.

Ryan Felton Wall Street Journal
Date Posted:

Chinese cars account for ~25% of sales in Mexico, and Canada will soon allow limited imports. According to a survey by Strategic Vision, a market research firm, ~30% of Americans would be open to buying a Chinese car.

Are Chinese cars already entering the US despite import restrictions?

Core argument: Chinese vehicles account for a quarter of total car sales in Mexico, and BYD, Geely, and Great Wall Motor rank among the world's biggest carmakers while gaining share in Europe and other parts of Asia.

BYD, Geely, and Great Wall Motor are now among the biggest carmakers in the world. They have been gobbling up market share in Europe and other parts of Asia. In Mexico, Chinese vehicles account for a quarter of total sales. Federal regulations allow Mexican residents and those with dual citizenship to drive their cars into the U.S., even if their vehicles aren’t compliant with relevant standards. That is giving Americans along the border a firsthand look at the Chinese competition. Soon, Canada will allow tens of thousands of inexpensive Chinese EVs to be imported. [Ohio Senator] Bernie Moreno [plans to introduce a bill that] would “hermetically seal” the U.S. from Chinese automakers. Chinese cars from Canada or Mexico couldn’t be driven into the country. American car companies couldn’t pursue joint ventures with Chinese automakers. Chinese car companies that own U.S. brands, such as Geely-controlled Volvo and Polestar, would have to divest themselves of those brands by 2030.

Takeaways by Macro Roundup® AI

  1. Chinese vehicles account for a quarter of total car sales in Mexico, and BYD, Geely, and Great Wall Motor rank among the world's biggest carmakers while gaining share in Europe and other parts of Asia.
  2. Federal regulations let Mexican residents and dual citizens drive their vehicles into the U.S. even when those cars do not comply with relevant standards, giving Americans along the border a firsthand look at Chinese models.
  3. Ohio Senator Bernie Moreno plans a bill to "hermetically seal" the U.S. from Chinese automakers by barring Chinese cars driven in from Canada or Mexico, prohibiting joint ventures, and requiring divestment of U.S. brands such as Volvo and Polestar by 2030.

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  • Will China Take Over the Global Auto Industry? — The global auto market has historically been regional, with most cars sold in a region also built there. Overcapacity in China's internal combustion sector, expanding electric-vehicle capacity, ample state bank credit, and a weaker yuan could concentrate global auto production in China absent restrictions such as the US 100% tariff on Chinese electric vehicles.
  • Where Did All the Affordable Cars Go? — The average new car transaction price is around $50,000, with new cars under $20,000 essentially unavailable, while auto repair costs rose 15% over the past year to roughly $840 per visit. The author argues the US should stop protecting Detroit and open the market to Chinese cars.

AI Summary. Japan's net debt is 130% of GDP versus gross debt of 240%, yet its 30-year government bond yield sits at roughly the same level as Germany's despite far higher public debt. The author argues Bank of Japan suppression of long-term yields pushes the fiscal risk premium into a weak yen instead.

Robin Brooks Robin Brooks Substack
Date Posted:

As long as the BOJ is able to suppress long-term borrowing costs via QE, Japan’s fiscal distress will be reflected in a “weak and falling Yen” rather than high bond yields. Absent major debt reduction, Brooks argues, the Yen will decline further.

Does capping long-term bond yields shift fiscal risk into the currency?

Core argument: Japan's gross government debt stands at 240% of GDP against net debt of 130%, yet its 30-year government bond yield sits at roughly the same level as Germany's despite Germany's far lower debt.

Japan’s net debt is “only” 130% of GDP versus gross debt of 240%. The chart shows 30-year government bond yields on the vertical axis and gross government debt on the horizontal axis. What’s striking is that Japan’s 30-year yield is basically at the same level as that of Germany, even though its public debt is at a much higher level. If markets were free to set the 30-year yield without BoJ interference, it would be much higher and the Yen would appreciate. But that can’t be allowed because this would cause a fiscal crisis. So Japan’s high debt and the associated fiscal risk premium show up in a weak and falling Yen. This is just another way for markets to price fiscal distress. As long as the BoJ caps long-term yields, that isn’t going to change. There are ways out of this cul-de-sac. The most obvious one is for the government to sell some of its financial assets and use the proceeds to retire public debt.

Takeaways by Macro Roundup® AI

  1. Japan's gross government debt stands at 240% of GDP against net debt of 130%, yet its 30-year government bond yield sits at roughly the same level as Germany's despite Germany's far lower debt.
  2. Without Bank of Japan interference, Japan's 30-year yield would be much higher and the Yen would appreciate, an outcome that cannot be allowed because it would cause a fiscal crisis.
  3. Japan's high debt and fiscal risk premium show up in a weak and falling Yen rather than in long-term yields, and one way out is for the government to sell financial assets and use the proceeds to retire public debt.

Related Articles:

  • 2026 Japan Economic Outlook: Steady Fundamentals, Policy Risks Ahead — Japan's government debt-to-GDP ratio has continued to decline despite an ongoing primary deficit, because the government's interest payment rate (0.8%) is far below nominal GDP growth (3.9%), a gap the authors call the widest since 1980 and worth roughly -7 percentage points a year.
  • Global Debt Report 2026 — Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.
  • Japan’s Debt Puzzle: Sovereign Wealth Fund from Borrowed Money — Japan's public sector operates as a highly leveraged sovereign wealth fund, funding risky assets by borrowing from banks and depositors at below-market rates, with returns sustaining its debt-to-GDP ratio above 200% without primary surpluses. The authors argue the resulting duration and currency mismatches expose Japan to mark-to-market losses that could trigger a fiscal crisis or a run on the yen.

AI Summary. Germany plans to raise defence spending to €144.9bn, from about €120bn, including roughly €11.5bn in military aid to Ukraine, and government figures point to €188.4bn by 2030, equivalent to 3.7% of GDP and above NATO's 3.5% core military spending requirement for 2035.

Anne-Sylvaine Chassany Financial Times
Date Posted:

Germany will increase defense spending ~21% y/y from ~€120B this year to ~€145B in 2027. Berlin is planning on spending ~€188B annually by 2030, ~3.7% of GDP.

Will Germany exceed NATO's military spending target ahead of schedule?

Core argument: Germany will spend €144.9bn on defence in 2027, up from about €120bn this year, according to government figures circulated ahead of a formal announcement.

Berlin will spend €144.9bn for defence in 2027, from about €120bn this year, according to government figures circulated ahead of a formal announcement on Wednesday. The figure for next year includes about €11.5bn in military aid to Ukraine, about the same amount as this year. The country has also set up a special €500bn debt fund to modernise its infrastructure over the next decade. The twin moves have upended years of fiscal orthodoxy as Europe’s largest economy seeks to grow again. Berlin was planning to spend €188.4bn on defence by 2030, according to government officials — including €8.5bn for Ukraine in case the conflict has not ended by then. This would be equivalent to 3.7% of GDP, above the 3.5% Nato core military spending requirements by 2035.

Takeaways by Macro Roundup® AI

  1. Germany will spend €144.9bn on defence in 2027, up from about €120bn this year, according to government figures circulated ahead of a formal announcement.
  2. Berlin plans €188.4bn of defence spending by 2030, equivalent to 3.7% of GDP, above Nato's 3.5% core military spending requirement due by 2035, according to government officials.
  3. Germany's 2027 defence figure includes about €11.5bn in military aid to Ukraine, roughly the same as this year, with €8.5bn set aside for 2030 in case the conflict has not ended.

Related Articles:

  • Defense Spending: Macroeconomic Consequences and Trade-Offs — Peacetime defense spending booms—when the two-year average of defense outlays rises 1pp of GDP—are followed by sizable increases in real GDP, government consumption, investment, and the capital stock, with a short-lived rise in inflation. Imports accelerate while exports are broadly unchanged, widening current account and trade deficits.
  • 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.
  • German Army Struggles to Get Gen Z Recruits ‘Ready for War’ — Germany's armed forces commissioner warned the country is not moving closer to its target of 203,000 active troops by 2031, as the military slightly shrank amid high dropout rates, with a quarter of new recruits leaving within six months. Conscientious objector applications reached 2,998, up from 200 in 2021.