Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 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 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 represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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 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


Monday, May 4, 2026

AI Summary. 42 AI-related stocks have accounted for 75%-85% of S&P 500 returns, earnings and capital spending since generative AI chatbots launched, and 80%-100% over the more recent period. Unlike the dot-com era, rising tech capital spending has not been accompanied by increased debt financing in aggregate.

Michael Cembalest J.P. Morgan
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Since November of 2025, JPM’s 42 AI-related stocks drove 42% of S&P 500 returns, 193% of earnings growth, and 84% of capital spending. Tech P/E multiples have just experienced one of the largest corrections of the last decade.

How much of S&P 500 returns come from AI stocks?

Core argument: 42 AI-related stocks have accounted for 75%–85% of S&P returns, earnings and capital spending since GPT launched in fall 2022, rising to 80%–100% of those same variables when measured from fall 2024.

42 AI-related stocks have accounted for 75%-85% of S&P returns, earnings and capital spending since GPT was launched in the fall of 2022. If we push this date forward to the fall of 2024 to capture the more intense phase of AI investing and adoption, these 42 AI-related stocks have accounted for 80%-100% of the same variables. Tech P/E multiples have just experienced one of the largest corrections of the last decade. Another interesting vantage point: US tech stocks have the lowest ratio of P/E to earnings growth (the PEG ratio). This is mostly a reflection of low PEG ratios for semiconductor stocks given 62% expected earnings growth, compared to just 16% earnings growth expected for the software sector. In contrast to the dot-com era, the increase in tech sector capital spending has not been accompanied by increased debt financing in the aggregate.

Takeaways by Macro Roundup® AI

  1. 42 AI-related stocks have accounted for 75%–85% of S&P returns, earnings and capital spending since GPT launched in fall 2022, rising to 80%–100% of those same variables when measured from fall 2024.
  2. US tech stocks carry the lowest ratio of P/E to earnings growth, mostly reflecting low PEG ratios for semiconductor stocks with 62% expected earnings growth versus 16% expected for software.
  3. Unlike the dot-com era, the increase in tech sector capital spending has not been accompanied by increased debt financing in the aggregate, while tech P/E multiples have undergone one of the largest corrections of the last decade.

Related Articles:

  • Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities — Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
  • Smothering Heights — The four largest cloud computing firms are devoting rising shares of revenue to capital spending and research, with Meta's combined share reaching 70%. Unlike past investment booms, this one has been financed mostly from internal cash flow: 28 direct AI stocks make up 50% of S&P 500 market value but just 5% of its net debt.
  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.

AI Summary. Saudi Arabia has withdrawn large financial commitments including a $200m gift to New York's Metropolitan Opera and support for the LIV golf league, and no equally large sovereign capital pool—Japan, Norway, or Singapore—is positioned to replace Gulf funds. A pullback could push US artificial intelligence firms toward greater reliance on debt issuance.

Rebecca Patterson Council on Foreign Relations
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Patterson argues US bound capital from the Gulf may be peaking given demand for increased defense and infrastructure spending in the aftermath of the war, which at the margin, implies more debt financing of the AI buildout.

What happens to US AI funding if Gulf sovereign capital retreats?

Core argument: Saudi Arabia withdrew a $200 million gift to New York City's Metropolitan Opera in April and confirmed in late April that it would end financial support for the LIV golf league after this season.

In April, Saudi Arabia’s $200 million gift for New York City’s Metropolitan Opera was withdrawn. Meanwhile, the Saudis confirmed in late April that they would withdraw financial support for the LIV golf league after this year’s season. Critically, if this trend continues and gains momentum, there is no obvious, equally large capital source waiting in the wings. Unlike a decade ago when China and the Middle East effectively swapped places as the main sovereign funder for the United States, the next largest pools of sovereign capital today—like Japan, Norway, and Singapore—have different investment strategies or are not as large as the GCC’s SWFs in aggregate. Without a very large and willing new pool of capital to take its place (U.S. investment managers have been trying to increase fundraising from domestic retail investors), a pullback in GCC funds would hit at a bad time for American AI firms as they continue to speed up their race to grow. If these firms cannot get the capital they need from public or private markets or friendly foreign investors, then they may need to rely more on debt issuance, which started raising eyebrows last fall among the investment community.

Takeaways by Macro Roundup® AI

  1. Saudi Arabia withdrew a $200 million gift to New York City's Metropolitan Opera in April and confirmed in late April that it would end financial support for the LIV golf league after this season.
  2. No equally large replacement exists for Gulf Cooperation Council sovereign wealth funds, as the next largest sovereign pools—Japan, Norway, and Singapore—follow different investment strategies or are smaller than the GCC's funds in aggregate.
  3. A pullback in Gulf capital would hit American AI firms as they accelerate their growth race, potentially pushing them toward greater reliance on debt issuance, which raised eyebrows among investors last fall.

Related Articles:

  • 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.
  • Oil, War and the Global Economy: The Market’s Narrative in March 2026 — Sovereign credit ratings in the war-zone countries have not changed, but market-based measures of default risk have risen across much of the Middle East, with larger increases in Qatar, the United Arab Emirates and Turkey than in Saudi Arabia and Kuwait. The United States has also seen its default-risk spread surge, and global sovereign spreads rose about 12%.
  • 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. Call center employment in the Philippines has reached nearly 2m workers and has grown every year since 2016, including through the artificial intelligence boom. As AI lowers the cost per customer interaction, companies are buying more of these services rather than fewer — an example of Jevons paradox.

Torsten Sløk Apollo
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The number of Filipinos working in call centers has risen every year since 2016 to ~2mm, despite the AI boom. Sløk argues this is “Jevons paradox in action: as AI makes call center work cheaper and faster, companies are buying more of it, not less.”

Does cheaper AI customer service increase call center employment?

Core argument: Nearly two million workers in the Philippines are employed in call centers, with employment rising every year since 2016 and continuing through the AI boom.

Nearly two million workers in the Philippines now work in call centers, up every year since 2016 and through the AI boom. This is Jevons paradox in action: as AI makes call center work cheaper and faster, companies are buying more of it, not less. Lower cost per interaction does not mean fewer interactions. It means more customers served, more channels opened and more markets worth reaching. The technology that was supposed to shrink the industry is fueling its expansion.

Takeaways by Macro Roundup® AI

  1. Nearly two million workers in the Philippines are employed in call centers, with employment rising every year since 2016 and continuing through the AI boom.
  2. The Philippine call center industry illustrates Jevons paradox, as AI makes each interaction cheaper and faster while companies buy more call center work rather than less.
  3. Lower cost per interaction means more customers served, more channels opened and more markets worth reaching, expanding rather than shrinking the call center industry.

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.
  • Generative AI and Entrepreneurship — The authors find that startups with a larger share of tasks doable by generative AI cut employment beginning immediately after ChatGPT's release, with technically proficient founders restructuring teams toward higher-skill roles. Venture investors made smaller but more numerous deals, and new firm entry offset the decline in total startup employment.

AI Summary. US power consumption has risen more in the past two years than in the previous 15 combined, yet supply has not kept pace and electricity prices have climbed more in four years than in the prior 14. The US Energy Information Administration projects generation to grow another 4.6%, with commercial users including data centers driving most added demand.

Joseph Politano Apricitas Economics
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American power consumption has increased more in the last two years than the previous 15 combined. Electrification has created ~300,000 jobs since 2019, including ~150,000 among electricians and electrical contractors.

Is US electricity supply growth falling behind surging demand?

Core argument: US power consumption has risen more in the last two years than over the previous 15 combined, yet electricity prices have also risen more over the last four years than in the prior 14.

America has entered another era of electrification—US power consumption has risen more in the last two years than over the previous 15 combined. Yet this hasn’t been nearly enough to meet demand, with electricity prices also rising more over the last 4 years than the prior 14. Projections from the US Energy Information Administration (EIA) expect generation to accelerate slightly over the next two years, growing another 4.6% in total, but that’s still not quick enough to close the gap or prevent further price appreciation. The return of sustained load growth after more than a decade and a half of stagnation represents a fundamental change in America’s energy markets, with the source of rising demand shifting alongside its scale. Indeed, the EIA expects more upcoming load growth to come from commercial entities—a category that includes data centers—than from industrial and residential uses combined. If those projections hold true, commercial power consumption will have grown more in the 4 years since ChatGPT’s launch than in the two decades prior.

Takeaways by Macro Roundup® AI

  1. US power consumption has risen more in the last two years than over the previous 15 combined, yet electricity prices have also risen more over the last four years than in the prior 14.
  2. The EIA projects US electricity generation will grow another 4.6% over the next two years, which it expects to be insufficient to close the gap with demand or prevent further price increases.
  3. The EIA expects more upcoming US load growth from commercial entities, a category that includes data centers, than from industrial and residential uses combined; if those projections hold, commercial consumption will have grown more in the four years since ChatGPT's launch than in the two decades prior.

Related Articles:

  • 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.
  • U.S. Electricity Generation in 2025 Hit A Record, Again — U.S. electricity net generation reached a record 4.43 terawatt hours, up 2.8% from the prior year's high, contrasting with relatively flat generation from the mid-2000s to the early 2020s. Much of the recent demand growth comes from the commercial sector, which includes data centers, and the industrial sector.
  • Electric Fury — Rising US electricity costs are burdening consumers and stirring voter anger, with the rapid build-out of artificial intelligence data centers, tariffs, and upgrades to an aging grid pushing power prices higher at rates unseen in decades. Utility bills have moved to the center of US politics alongside grocery prices.

AI Summary. France is relatively well positioned to absorb higher energy prices because its economy is less manufacturing-oriented and its industry less energy-intensive than elsewhere in Europe, and its nuclear output has returned to normal after falling a third below capacity. Nuclear supplies close to 70% of French power, making electricity prices less sensitive to gas prices.

Alexandre Stott Goldman Sachs
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GS argues France’s economy is better positioned than most other European countries to cope with the increase in energy prices as nuclear power makes up ~70% of power production which “helps to sever the link between electricity and gas prices.”

Does nuclear power shield France from higher energy prices?

Core argument: Nuclear power accounts for close to 70% of France's electricity production, which makes French electricity prices much less sensitive to gas prices than in other European countries.

France’s economy is relatively well positioned to cope with the increase in energy prices. The first reason is that it is less manufacturing-oriented, and its industry is less energy-intensive than elsewhere in Europe (Exhibit 1, left). Second, nuclear power production is back to normal, after having fallen a third below capacity in 2022 following repairs and outages in 2022 (Exhibit 1, right). We recently showed that France’s large nuclear fleet (close to 70% of all power production) makes electricity prices much less sensitive to gas prices than in other European countries.

Takeaways by Macro Roundup® AI

  1. Nuclear power accounts for close to 70% of France's electricity production, which makes French electricity prices much less sensitive to gas prices than in other European countries.
  2. French nuclear output has returned to normal after falling a third below capacity in 2022 following repairs and outages.
  3. France's economy is relatively well positioned to cope with higher energy prices because it is less manufacturing-oriented and its industry is less energy-intensive than elsewhere in Europe.

Related Articles:

  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
  • This Time is Different (from 2022) — The Impact of Higher Energy Prices on European Manufacturing Industries — Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027, compared with an estimated 4% drag during the 2022/23 energy crisis. The current shock is primarily an oil supply shock affecting industry broadly and is more global, leaving European energy-intensive industries less exposed to competitiveness pressures.
  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.

AI Summary. Fielding a drone fleet able to compete with China requires the U.S. to break China's monopoly on batteries and motors and to cut the cost of other components, where weak domestic demand is a key obstacle. Chinese producers hold 80% of the U.S. commercial drone market, and experts warn building mass-production infrastructure could take a decade or more.

Josh Chin, Merrill Sherman, Jason French and Ievgeniia Sivorka Wall Street Journal
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The American drone industry is reliant on military demand whereas China owns ~80% of the American commercial drone market due to DJI’s cheap high performance drones.

What stands in the way of a competitive domestic drone industry?

Core argument: China holds 80% of the U.S. commercial drone market, according to Drone Industry Insights, with nearly all of that share attributable to DJI Technology's cheap, high-performance drones used by content producers, real-estate agents, factory inspectors, and police and fire departments.

To have a hope of fielding a sustainable drone fleet capable of competing with China, the U.S. needs to solve two problems. First, it needs to find a way to break China’s monopoly on batteries and motors. The Trump administration has injected billions of dollars into American companies that produce critical minerals that are needed to make motors and batteries, though the experts warn that building up the complex infrastructure needed for mass production could take a decade or more. It also needs to find ways to bring down the costs of the other parts as much as possible. Demand is a key issue here, industry insiders say. China owns 80% of the commercial drone market in the U.S., according to data from Drone Industry Insights. Nearly all of that dominance is thanks to Chinese giant DJI Technology, a maker of cheap but high-performance drones beloved by content producers, real-estate agents, factory inspectors and cash-strapped American police and fire departments.

Takeaways by Macro Roundup® AI

  1. China holds 80% of the U.S. commercial drone market, according to Drone Industry Insights, with nearly all of that share attributable to DJI Technology's cheap, high-performance drones used by content producers, real-estate agents, factory inspectors, and police and fire departments.
  2. Fielding a sustainable drone fleet able to compete with China requires the U.S. to break China's monopoly on batteries and motors and to cut the costs of other drone components.
  3. The Trump administration has put billions of dollars into American producers of the critical minerals needed for motors and batteries, though experts warn that building the infrastructure for mass production could take a decade or more.

Related Articles:

  • Drones Are Key to Winning Wars Now. The U.S. Makes Hardly Any — China's DJI accounts for about 70% of commercial drones sold globally, and industry experts estimate its output far exceeds that of any other manufacturer, with capacity in the millions of drones a year. About 500 US companies manufacture drones, producing fewer than 100,000 annually, according to an industry association.
  • Why Every Country Needs To Master The Electric Tech Stack — Drones are the foundation of hard power in the early 21st century, so a country unable to produce them domestically is at a disadvantage. As electric motors overtake combustion engines as the core technology that makes machines move, the same supply chains and production processes used for electronics can also produce cars, drones, robots, and appliances.
  • Taiwan’s Bid To Export Drones Free Of Chinese Parts Is Taking Off — Taiwan is marketing drones built without Chinese parts to the US and allies concerned about Chinese espionage and supply-chain control, with production rising from about 10,000 units to more than 12x that level and exports climbing more than 35-fold to roughly 123,000 units. The Czech Republic and Poland were the largest buyers.

Tuesday, May 5, 2026

AI Summary. Europe trains more engineering graduates per capita than China and more STEM PhDs than any region outside the United States, yet the only EU-born companies to reach $100bn market value in the past fifty years, Spotify and BioNTech, listed on US exchanges. Europe captures 6% of global AI startup funding versus 61% for the United States.

Mario Keputa Social Science Research Network
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Despite top STEM talent and high savings, Europe captures just 6% of AI funding and lacks trillion-dollar firms. Between 2008 and 2021, ~30% of EU-founded unicorns relocated abroad, largely to the US, seeking deeper liquidity, higher valuations, and pro-growth regulation.

Why does Europe's world-class STEM talent fail to produce giant companies?

Core argument: Europe captures just 6% of global AI startup funding, versus 61% for the United States and 17% for China, despite training more engineering graduates per capita than China and more STEM PhDs than any region outside the U.S.

Europe produces more engineering graduates per capita than China. It trains more PhDs in STEM fields than any region outside the United States. Europe's universities rank among the world's best in dozens of disciplines. Europe's household savings rate exceeds that of America. Europe's research output, measured by publications and citations, is world-class. And yet the only EU-born companies to reach a market capitalisation of $100 billion in the past fifty years, Spotify and BioNTech, did so on the NYSE and Nasdaq respectively. Both chose American exchanges over European ones. None of the world's trillion-dollar companies is European. Europe captures just 6% of global AI startup funding, compared with 61% for the United States and 17% for China. Between 2008 and 2021, nearly 30% of European-founded unicorns relocated their headquarters abroad, overwhelmingly to the United States. They did not leave for the weather. They left because U.S. capital markets offered deeper liquidity, broader analyst coverage, higher valuations, and a regulatory environment designed for growth.

Takeaways by Macro Roundup® AI

  1. Europe captures just 6% of global AI startup funding, versus 61% for the United States and 17% for China, despite training more engineering graduates per capita than China and more STEM PhDs than any region outside the U.S.
  2. The only EU-born companies to reach $100bn market capitalisation in the past fifty years, Spotify and BioNTech, listed on the NYSE and Nasdaq respectively, and none of the world's trillion-dollar companies is European.
  3. Nearly 30% of European-founded unicorns relocated their headquarters abroad between 2008 and 2021, overwhelmingly to the United States, where capital markets offered deeper liquidity, broader analyst coverage, higher valuations, and a regulatory environment designed for growth.

Related Articles:

  • 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.
  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.

AI Summary. Germany's large economic stimulus has been slowed by bureaucratic procedures that delay infrastructure spending, though the country suspended planning rules to build three liquefied natural gas terminals in about 10 months instead of the usual five years. A bill in parliament would extend similar streamlining to large infrastructure projects.

Bertrand Benoit and Tom Fairless Wall Street Journal
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Germany’s $584B planned infrastructure spending has been slowed by regulation and capacity bottlenecks. In 2022, Berlin suspended planning regulations to bring LNG capacity on line in under a year. A new bill would fast-track infrastructure projects.

Can suspending planning rules speed up stalled infrastructure spending?

Core argument: Germany's stimulus package passed last year was intended to lift both the German and European economies out of stagnation, but the funds are not being spent.

A mammoth economic stimulus passed last year in Germany was meant to jolt the country—and Europe—out of its economic slumber. The problem: Germans just aren’t good at spending money. [Yet] Germany has shown it can get rid of bureaucratic strictures. In 2022, after Russia invaded Ukraine and choked natural gas deliveries to Europe, Berlin suspended planning regulations to build three liquefied natural gas terminals on its northern coast. The projects, which would have normally taken five years, were completed in about 10 months. A bill in parliament would try to do the same for big infrastructure projects, which can currently stretch into years because of onerous consultation procedures and lengthy court challenges.

Takeaways by Macro Roundup® AI

  1. Germany's stimulus package passed last year was intended to lift both the German and European economies out of stagnation, but the funds are not being spent.
  2. After Russia's 2022 invasion of Ukraine cut natural gas deliveries to Europe, Berlin suspended planning regulations and completed three liquefied natural gas terminals on its northern coast in about 10 months rather than the usual five years.
  3. A bill before the German parliament would extend that streamlining to large infrastructure projects, which currently stretch into years because of onerous consultation procedures and lengthy court challenges.

Related Articles:

  • Why Germany’s Confidence Is Shattered and Its Economy Is Kaput — Germany's economy has contracted for two consecutive years, with manufacturing output down about 10% and companies shedding thousands of jobs a month amid rising costs and falling exports. German households paid the highest electricity prices in the European Union, and Germany's patent applications were less than half those of South Korea and Japan.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
  • 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 U.S. has the world's highest rate of household stock ownership, at a record high in its own history, making retail investors a central force in capital markets. With roughly 60% of households owning stocks, the author argues market moves feed directly into elections, retirement security, and consumer spending that transmits U.S. equity shocks worldwide through trade.

Paul Kedrosky Notes on Complexity
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As of 2024, 55% of US households had either direct or indirect stock market exposure, compared to 15% in Japan and 14% in Germany. Other Anglosphere countries ranged from 33% in the UK to 49% in Canada.

How does the world's highest household stock ownership shape the economy?

Core argument: U.S. stock ownership leads the world and stands at a record high in its own series history, making retail investors a real force in capital markets rather than side players.

The U.S. leads the world in stock ownership, as well as being at record high levels in its own series history. This makes retail investors the real force in capital markets, not merely side players, as has become increasingly clear for a decade now. This, of course, has consequences. Here are six: [First] Monetary policy transmission is direct. [Second] Markets and politics. When 60% of households own stocks, markets drive elections. [Third] Passive indexing makes it worse. [Fourth] Retirement security is market performance. [Fifth] Inequality is amplified. The 60% figure is misleading because the bottom half of that cohort owns virtually no stock. [Sixth] Contagion from US markets is a virus. Because US households are so deeply exposed, a domestic equity crisis hits consumer spending, which then spreads worldwide through trade. The US market is the world's risk-off/risk-on switch, and the household exposure ratio is part of why.

Takeaways by Macro Roundup® AI

  1. U.S. stock ownership leads the world and stands at a record high in its own series history, making retail investors a real force in capital markets rather than side players.
  2. With 60% of U.S. households owning stocks, monetary policy transmission is direct, markets drive elections, and retirement security becomes a function of market performance.
  3. The 60% ownership figure is misleading because the bottom half of that cohort owns virtually no stock, and deep U.S. household exposure means a domestic equity crisis hits consumer spending and spreads worldwide through trade.

Related Articles:

  • Abandon Ship! — 42 AI-related stocks have accounted for 75%-85% of S&P 500 returns, earnings and capital spending since generative AI chatbots launched, and 80%-100% over the more recent period. Unlike the dot-com era, rising tech capital spending has not been accompanied by increased debt financing in aggregate.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.
  • Zero-Sum Thinking and the Roots of US Political Differences — The authors construct an index of "zero-sum thinking" — the belief that one group's economic gains come at another's expense across ethnic groups, citizens versus non-citizens, and countries in international trade. Among both moderate and strong Democrats, those in the top quartile of zero-sum thinking voted for Donald Trump at a disproportionately high rate.

AI Summary. Federal Reserve data show bequeathable wealth rose from 256% of gross domestic product in 1997 to 424% in 2021, with 97% of that increase coming from households headed by someone 55 or older. Projections estimate about $1.3tn will pass to spouses this year versus roughly $2tn to Generation X and younger heirs.

Rachel Louise Ensign and James Benedict Wall Street Journal
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The age at which Americans are inheriting money has risen. According to Federal Reserve surveys, btw 1998 and 2010, Americans in their late 50s were most likely to report receiving an inheritance; by 2013–2022, that age had ticked up to the mid 60’s.

How soon will older Americans' accumulated wealth reach younger heirs?

Core argument: Fed data indicate bequeathable wealth rose from 256% of GDP in 1997 to 424% in 2021, with 97% of that increase coming from households headed by someone aged 55 or older.

Fed data [indicates] that what is known as the bequeathable wealth rose from 256% of gross domestic product in 1997 to 424% in 2021, the last year of available data. A staggering 97% of that increase was due to wealth gains in households where the head of household was 55 or older. Older Americans may keep accumulating wealth, especially if the stock market keeps rising. But some will spend it on living costs and expensive long-term care, leaving less for heirs. When they die, many will leave their money to their spouses, who are often in their same generation. This year, around $1.3 trillion is expected to be passed onto spouses, compared with about $2 trillion to heirs in Gen X and younger generations, according to projections from research firm Cerulli Associates.

Takeaways by Macro Roundup® AI

  1. Fed data indicate bequeathable wealth rose from 256% of GDP in 1997 to 424% in 2021, with 97% of that increase coming from households headed by someone aged 55 or older.
  2. Cerulli Associates projects about $1.3 trillion will pass to spouses, often of the same generation, this year, compared with roughly $2 trillion to heirs in Gen X and younger generations.
  3. Older Americans may keep accumulating wealth if the stock market keeps rising, though some will spend it on living costs and expensive long-term care, leaving less for heirs.

Related Articles:

  • A Preliminary Report on Taxing the Great Wealth Transfer: Revenue and Distributional Effects of Taxes on Estates, Inheritances, and Unrealized Capital Gains at Death — The authors argue that replacing the estate tax, paid by those who die, with an inheritance tax, paid by recipients, could raise more revenue and increase progressivity because it targets large individual transfers rather than estates divided among several family members. They also note unrealized capital gains held until death escape income tax entirely.
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AI Summary. European wholesale power prices have returned to levels close to those before Russia's invasion of Ukraine, with France's benchmark one-year-forward contract trading near €50 ($58.60) per megawatt hour versus an all-time high of €1,130. French nuclear output has recovered to 45–55 gigawatts from a 30-year low below 21 GW, and hydropower has rebounded from drought-depressed levels.

Javier Blas Bloomberg
Date Posted:

The muted response to the Iran war in European electricity prices relative to 2022 is due to a combination of increased LNG capacity, French nuclear output, higher water levels increasing hydro output, and the results of the solar buildout.

Have European power prices returned to prewar levels?

Core argument: France's benchmark one-year-forward power contract trades at about €50 ($58.60) per MWh, roughly its pre-war level and a fraction of the August 2022 record of €1,130 per MWh.

The French market, at the epicenter of the 2022 electricity convulsion, stands out. Its benchmark one-year-forward power contract is changing hands at about €50 ($58.60) per megawatt hour, roughly the same as before the war and a fraction of the all-time high set in August 2022 of €1,130 per MWh. It’s a similar story in Germany, the UK, Italy and Spain, where wholesale power prices remain well below the peaks of four years ago, and close to their 2025 norms. At the nadir, France’s nuclear plants were operating at a 30-year low of less than 21 gigawatts of capacity, a fraction of the 45-to-55 GW typically available now. And this wasn’t just a problem for the Paris government. French reactors play an outsize role in providing baseload power to Germany, too. If nuclear has rebounded, so has hydro. Although often overlooked, this is the European Union’s fourth-biggest source of power after gas, nuclear and wind, generating nearly 14% of the bloc’s electricity. Back in 2022 the continent was suffering from what Ember, a green-energy think tank, described as a one-in-500-year drought, with output from plants using rivers’ natural flows at a two-decade-plus low.

Takeaways by Macro Roundup® AI

  1. France's benchmark one-year-forward power contract trades at about €50 ($58.60) per MWh, roughly its pre-war level and a fraction of the August 2022 record of €1,130 per MWh.
  2. French nuclear plants, which fell to a 30-year low of less than 21 gigawatts of capacity, now typically have 45 to 55 GW available, supplying baseload power to Germany as well as France.
  3. Hydro, the EU's fourth-biggest power source after gas, nuclear and wind at nearly 14% of the bloc's electricity, has rebounded from the 2022 drought that the think tank Ember described as a one-in-500-year event.

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AI Summary. A survey of 5,357 Americans found that those without a college degree report less neighborhood engagement, including problem-solving with neighbors, socializing, and messaging. 58% of college graduates spent an evening with a neighbor in the past year versus 46% of those with a high school education or less.

Daniel Cox, Jae Grace, and Avery Shields American Enterprise Institute
Date Posted:

In 2012, 51% of Americans aged 18–29 and 59% of all Americans spoke to their neighbors “at least a few times per week.” By 2025, only 25% of 18–29 year olds did relative to 40% of Americans overall. The effect was less pronounced for college grads.

Does education level affect how much Americans engage with neighbors?

Core argument: In the 2025 American Neighbor Survey of 5,357 Americans, 58% of college graduates report spending an evening with someone in their neighborhood at least once in the past year, compared with 46% of those with a high school education or less.

[According to the 2025 American Neighbor Survey of 5,357 Americans] those without a college degree are less engaged in various activities in their neighborhoods. These activities include working with people from their neighborhood to solve problems, spending social time with neighbors, exchanging texts or emails, and walking or running in their neighborhood. Nearly six in 10 (58%) college graduates report that they spent an evening with someone in their neighborhood at least once in the past year. Fewer than half (46%) of Americans with a high school education or less say the same. Moreover, 46% of Americans with a college degree say they have worked with their neighbors to address a problem or improve their neighborhood, compared with only about one in three (34%) of those without any college education.

Takeaways by Macro Roundup® AI

  1. In the 2025 American Neighbor Survey of 5,357 Americans, 58% of college graduates report spending an evening with someone in their neighborhood at least once in the past year, compared with 46% of those with a high school education or less.
  2. The 2025 American Neighbor Survey found that 46% of Americans with a college degree have worked with neighbors to address a problem or improve their neighborhood, compared with 34% of those without any college education.
  3. The 2025 American Neighbor Survey finds Americans without a college degree are less engaged across neighborhood activities, including solving problems with neighbors, socializing, exchanging texts or emails, and walking or running in their neighborhood.

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  • America’s Cultural Crossroads: Enduring Discontent, Rising Disconnection, and an Uncertain Future — Americans with more close friends express greater confidence that others behave fairly: 59% of those with no close friends say most people would take advantage of them, versus 29% of those with at least six close friends.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.