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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


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.
  • Is Inherited Wealth Bad? — Long-run data for France, Sweden and the UK show inheritance flows fell from roughly 15-25% of national income around 1900 to 10-15%, and the inherited share of private wealth dropped from about 80% to 40-60%, implying more wealth is now accumulated through work, saving and entrepreneurship.
  • How To Get Rich in 2025 — Academic estimates compiled by The Economist indicate inheritances, after falling over the 20th century, were worth about 10% of GDP on average by the end of the 2010s, with roughly $6tn inherited across the rich world in a year. Falling family sizes mean each inheritance is spread across fewer heirs.

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
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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.

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.
  • 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. 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
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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.

Related Articles:

  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • 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.

Wednesday, May 6, 2026

AI Summary. China's current account surplus remains about the same size relative to the world economy as it was in 2008, while net US liabilities reached 24% of global output in 2024 versus 6% in 2008, with government borrowing now the domestic counterpart of US external deficits. Such imbalances drive protectionist sentiment and have preceded financial crises.

Martin Wolf Financial Times
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US net liabilities were ~24% of global output in 2024, relative to 6% going into the crisis in 2008. Because the private sector, now driven by high household savings, is in surplus, the government deficit absorbs more than 100% of capital inflows.

How large are global imbalances today compared with before the financial crisis?

Core argument: Net US liabilities reached 24% of global output in 2024, against 6% in 2008, while the US private sector has moved into balance, leaving US government borrowing as the domestic counterpart of external deficits.

China’s reported surplus is much the same size now relative to the world economy as it was in 2008, though it is a far smaller share of its own GDP because the relative size of its economy has more than doubled. One difference is that former deficit European countries are now running a small surplus. More important differences are that net US liabilities reached 24% of global output in 2024 against a mere 6% in 2008, and that the US private sector has moved into balance. So, the domestic counterpart of its external deficits today is borrowing by the US government. Once roughly every 20 years, it appears, [the issue of global imbalances] comes to the fore. This is so for two good reasons. One is that current account imbalances drive protectionist sentiment. The other is that they are harbingers of financial crisis. In the 1980s, protectionist sentiment rose against Japan, which is also where the financial crisis struck. In the 2000s, the era of “the China shock”, protectionism began to rise against China and a financial crisis hit the western world. In the 2020s, protectionism is already here, in the US above all. But the financial crisis is not — or at least not yet.

Takeaways by Macro Roundup® AI

  1. Net US liabilities reached 24% of global output in 2024, against 6% in 2008, while the US private sector has moved into balance, leaving US government borrowing as the domestic counterpart of external deficits.
  2. China's reported surplus is about the same size relative to the world economy as in 2008, but a far smaller share of its own GDP because the relative size of its economy has more than doubled.
  3. Global imbalances return to prominence roughly every 20 years because current account imbalances drive protectionist sentiment and herald financial crises; protectionism has already arrived, above all in the US, but the financial crisis has not.

Related Articles:

  • Why Global Imbalances Do Matter — From 2008 to 2023 the US household and corporate sectors ran average savings surpluses of 3.5% and 1.6% of GDP respectively, leaving the federal government as the dominant net borrower in the US economy. This suggests the benefit of persistent net capital inflows is the ability to run larger fiscal deficits and grow public debt.
  • 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.
  • Europe Has No Choice But To Intervene On Trade — Manufacturing competitiveness is argued to stem largely from lower labor costs relative to productivity, so policies that raise the household share of income weaken competitiveness while countries that suppress wages gain at trade partners' expense. The author argues Europe must therefore intervene in its external accounts to offset foreign trade intervention rather than cut wages and welfare.

AI Summary. Economists argue that large current account deficits and surpluses reflect unbalanced growth: chronically low household consumption in China, persistently weak productive investment in the European Union, and enduring fiscal deficits in the United States. They recommend China shift fiscal resources toward healthcare and safety nets, and the European Union raise its growth potential.

Chong-En Bai, Gita Gopinath, Hélène Rey and Axel Weber G7
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Deep structural problems underlie global imbalances. China maintains low domestic consumption, the EU suffers from weak productive investment levels, and the US runs excessively large fiscal deficits. All three need to be addressed.

How can global imbalances be addressed through rebalancing growth?

Core argument: The G7 economists attribute excessive current account deficits and surpluses to unbalanced growth dynamics: China's chronically low domestic consumption, the EU's persistently weak productive investment, and enduring US fiscal deficits.

The rise of excessive current account deficits and surpluses reflects increasingly unbalanced growth dynamics in China, the EU, and the US. China has chronically low domestic consumption, the EU suffers from persistently weak levels of productive investment, and the US has enduring fiscal deficits. Addressing global imbalances requires rebalancing growth, which is in the individual and collective interest of China, the EU, and the US. China’s growth can be rebalanced by increasing ‘investment in people’ as prioritized in its 15th Five-Year Plan. This calls for public support for healthcare, safety nets, repairing balance-sheets damaged by the property market crisis, changing incentives of regional administrators, and scaling down unwarranted industrial policies to free up fiscal resources for investing in people. The European Union should raise its growth potential by implementing key recommendations of the Draghi report.

Takeaways by Macro Roundup® AI

  1. The G7 economists attribute excessive current account deficits and surpluses to unbalanced growth dynamics: China's chronically low domestic consumption, the EU's persistently weak productive investment, and enduring US fiscal deficits.
  2. The memo argues China can rebalance growth through "investment in people" as prioritized in its 15th Five-Year Plan, including public support for healthcare, safety nets, repair of balance sheets damaged by the property market crisis, and changed incentives for regional administrators.
  3. The G7 economists call on China to scale down unwarranted industrial policies to free fiscal resources for investing in people, and on the European Union to raise its growth potential by implementing key recommendations of the Draghi report.

Related Articles:

  • The U.S. Trade Deficit: Myths and Realities — Taxing capital inflows would weaken the dollar but could raise domestic interest rates and depress investment, harming long-term growth, while an interest rate cut absent recession would be inflationary and erode any real depreciation needed to durably improve the trade balance. Fiscal restraint could weaken the dollar and reduce the trade deficit.
  • The Chinese Current Account Imbalances: Puzzles, Patterns, and Possible Causes — Households in China with a son save more where local male-female ratios are skewed, while savings by households with a daughter show no such relationship; the authors estimate this competition in the marriage market accounts for more than half the rise in China's household saving rate from 1990 to 2007, contributing to excess saving and a larger current account surplus.
  • China’s Trade Surplus, Part I — China's very high investment rates, combined with a shrinking workforce and slowing productivity, produce sharply diminishing returns, making its decades-old high-savings, high-investment growth model unsustainable. The author argues China's leaders resist a pivot toward consumption because of ideology and geopolitical ambition, with the leadership rejecting welfare spending as breeding dependency.

AI Summary. Adjusted for inflation, SpaceX alone would rank as the second-largest initial public offering ever, behind Saudi Aramco, and three such listings together would exceed the entire 1995–2000 dot-com wave. Funding that equity supply requires selling existing holdings, and index rule changes make passive funds forced buyers, pressuring large-cap technology stocks.

Paul Kedrosky Notes on Complexity
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At hoped-for valuations, the sum of SpaceX’s, OpenAI’s and Anthropic’s gross valuations at IPO would exceed the valuation of the entire dot-com IPO wave of 1995–2000 in real terms.

Will a wave of giant IPOs pressure large-cap technology stocks?

Core argument: SpaceX alone would rank as the second-largest IPO in history in inflation-adjusted terms, behind only Saudi Aramco, and the three mega-IPOs together would exceed the entire dot-com IPO wave of 1995–2000.

In inflation-adjusted terms, SpaceX alone would rank as the second-largest IPO in history, just behind Saudi Aramco. All three together would exceed the entire dot-com IPO wave of 1995–2000. They will be at least half the value, inflation-adjusted, of all US IPOs since WWII. That much new equity supply hitting in a few months creates a math problem: the money has to come from somewhere. Most of it will come from existing holdings. Passive funds will be forced buyers once these names join the indexes, which will happen much faster than usual, given recent index rule changes. That means mechanical selling pressure on whatever many funds currently own, which is mostly the same large-cap tech stocks that everyone else owns.

Takeaways by Macro Roundup® AI

  1. SpaceX alone would rank as the second-largest IPO in history in inflation-adjusted terms, behind only Saudi Aramco, and the three mega-IPOs together would exceed the entire dot-com IPO wave of 1995–2000.
  2. The three mega-IPOs would total at least half the inflation-adjusted value of all US IPOs since World War II, and that much equity supply arriving within a few months would have to be funded largely from existing holdings.
  3. Passive funds will be forced buyers once the new listings join indexes, which recent index rule changes will accelerate, creating mechanical selling pressure on their current holdings, mostly the same widely held large-cap tech stocks.

Related Articles:

  • Trampled Underfoot by a Stampede of Unicorns — A database trawl counts 1,727 private companies valued above $1bn globally, and if private market valuations are accurate, the largest of them have outperformed public markets since the pandemic. Several, led by SpaceX and OpenAI, plan initial public offerings, which can signal trouble ahead since insiders are choosing to sell.
  • 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.
  • The Deep End: 2025 Alternative Investments Review — In venture capital, only consistently investing with top-quartile managers outperformed the S&P 500, while the median manager at best matched public equity markets and fourth-quartile managers destroyed value relative to equities. Fees are part of the issue: an 11.7% annualized NASDAQ 100 return falls to 7.4% under a 2%/20% fee structure.

AI Summary. In a survey of generative AI users, a plurality across most occupations reported that the tools assist with tasks requiring intermediate expertise, with high-expertise assistance reported by over 30% in computer and math, architecture and engineering, and management roles but under 10% in some manual occupations.

Alexander Bick, Adam Blandin, David Deming and Tyler Schumacher National Bureau of Economic Research
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In a real-time survey, >30% of workers in tech and professional occupations reported that genAI assists with high-expertise tasks, compared to <10% in manual jobs. The modal response saw AI assisting in medium-expertise tasks.

What level of expertise does generative AI assist workers with?

Core argument: In the Real Time Population Survey, more than 30% of workers in Computer and Math, Architecture and Engineering, and Management occupations report that generative AI assists with high-expertise parts of their job.

The RPS [Real Time Population Survey] asked genAI users whether genAI primarily assisted them with low-, moderate-, or high-expertise parts of their job (workers could select multiple options). Figure 7 displays the average responses by broad occupation. In most occupations, a plurality of workers indicate that genAI assists with work that require intermediate expertise. In most technical and professional occupations, a relatively large share of workers report that genAI assists with high-expertise work. Computer and Math, Architecture and Engineering, and Management Occupations all exhibit high-expertise shares above 30%. By contrast, many occupations involving manual work exhibit small shares of workers who report high-expertise assistance - e.g. Protective Service and Buildings and Grounds Maintenance occupations exhibit high-expertise shares below 10%. However, we also observe a few interesting counterexamples to these patterns. Installation, Maintenance, and Repair Occupations, which involve substantial manual work and average education rates, exhibit large high-expertise shares. In the other direction, Legal Occupations, which exhibit high adoption rates, high education levels, and minimal manual work, exhibit small high-expertise shares. Overall, these patterns suggest that genAI does not map cleanly into a uniform “low-expertise” or “high-expertise” case.

Takeaways by Macro Roundup® AI

  1. In the Real Time Population Survey, more than 30% of workers in Computer and Math, Architecture and Engineering, and Management occupations report that generative AI assists with high-expertise parts of their job.
  2. Protective Service and Buildings and Grounds Maintenance occupations show high-expertise generative AI assistance shares below 10%, while in most occupations a plurality of users report that generative AI assists with work requiring intermediate expertise.
  3. Installation, Maintenance, and Repair occupations show large high-expertise shares despite substantial manual work and average education rates, while Legal occupations show small high-expertise shares despite high adoption rates, high education levels, and minimal manual work.

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AI Summary. Statistics Canada reports 16.3% of millennials aged 25 to 39 lived with their parents in 2021, compared with 8.2% of baby boomers at the same age in 1991, with the pattern most pronounced in expensive cities. Homeownership among 25-to-39-year-olds was 49.9%, down from about 56% for baby boomers and Gen Xers at that age.

Nojoud Al Mallees Bloomberg
Date Posted:

16.3% of Canadians aged 25–39 were living with their parents in 2021, up from 8.2% of baby boomers at the same age in 1991.

Are more young adults living with parents and owning fewer homes?

Core argument: A Statistics Canada study based on the most recent census data found 16.3% of millennials aged 25 to 39 lived with their parents in 2021, up from 8.2% of baby boomers at the same age in 1991.

Millennials were twice as likely to live with their parents in 2021 than baby boomers were at the same age, a trend that was particularly acute in expensive cities but not fully attributed to affordability challenges. A new Statistics Canada study based on the most recent census data found 16.3% of millennials aged 25 to 39 were living with parents, up from 8.2% of baby boomers of the same age in 1991. After taking into account the share of millennials living with parents, the study found a lower rate of homeownership among young adults in 2021. While 55.9% of baby boomers in 1991 and 56.2% of Gen Xers in 2006 owned a home when they were aged 25 and 39, that proportion was only 49.9% for millennials.

Takeaways by Macro Roundup® AI

  1. A Statistics Canada study based on the most recent census data found 16.3% of millennials aged 25 to 39 lived with their parents in 2021, up from 8.2% of baby boomers at the same age in 1991.
  2. After accounting for the share of millennials living with parents, Statistics Canada found homeownership among those aged 25 to 39 was 49.9% for millennials in 2021, compared with 55.9% for baby boomers in 1991 and 56.2% for Gen Xers in 2006.
  3. The trend of young Canadians living with parents was particularly acute in expensive cities, though Statistics Canada did not fully attribute it to affordability challenges.

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