Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 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 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 comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “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
  • “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
  • “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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…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


Monday, May 11, 2026

AI Summary. French gross domestic product per person, adjusted for purchasing power, was 74% of the US level in 2001 and 73% in 2024, while Germany closed some of the gap, indicating European living standards have not fallen behind. Higher measured US growth is attributed to rapid productivity growth in information technology, a sector the US dominates.

Paul Krugman Krugman Wonks Out
Date Posted:
Is Database:
Database
Is Important:
Important

US outperformance in GDP growth relative to Europe is almost entirely due to the tech sector. Krugman argues the gains are passed on to Europe in the form of lower prices. In PPP terms, the ratio of Europe’s GDP to that of the US hasn’t fallen since 2002.

Have European living standards fallen behind the US over recent decades?

Core argument: French GDP per capita at PPP was 74% of the U.S. level in 2001 and 73% in 2024, while German GDP per capita closed some of the gap with the U.S.

European economies do produce less per person than the U.S. does. In 2001 French GDP per capita, measured at PPP was 74% of the US level. In 2024 the ratio was basically the same: 73%. German GDP per capita actually closed some of the gap with the US. By this measure, a comparison between European and US living standards look about the same today as it did 25 years ago: Europe is not falling behind. The key to understanding US-Europe comparisons is to realize that higher measured US growth is overwhelmingly driven by a small part of the American economy: “tech.” As the Draghi report acknowledges, essentially all of America’s productivity growth has been generated by rapid productivity growth in information technology, which the US currently dominates. Do the gains stay in America or are they shared with the tech sector’s customers, wherever they are? The answer to this question crucially depends upon whether there is competition among technology companies. If there is, then the answer to the question is no: rising productivity will be passed on to consumers in both countries through low prices.

Takeaways by Macro Roundup® AI

  1. French GDP per capita at PPP was 74% of the U.S. level in 2001 and 73% in 2024, while German GDP per capita closed some of the gap with the U.S.
  2. Higher measured U.S. growth is overwhelmingly driven by "tech," and the Draghi report acknowledges that essentially all of America's productivity growth comes from rapid productivity growth in information technology, which the U.S. currently dominates.
  3. Whether U.S. tech productivity gains stay in America or reach customers abroad depends on competition among technology companies: with competition, rising productivity would be passed to consumers in both countries through low prices.

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.
  • 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.
  • Why Do Americans No Longer Work So Much More Than Non-Americans? — About half of the 1990s gap between American and European hours worked had reversed by the end of the 2010s. The authors estimate US hours per person declined after the 2000s because of rising benefits for the non-employed—especially health benefits like Medicaid—while non-US hours rose with higher wages and lower work costs.

AI Summary. Using an AI model to estimate how much earlier each of 190 major inventions could plausibly have appeared, the author finds most gaps are small: 64% had an "earliest plausible" date within 50 years of the actual date, and 90% had an "earliest straightforward" date within 50 years.

Brian Potter Construction Physics
Date Posted:
Is Database:
Database

An analysis using Claude finds that for more than half of 190 inventions, the delay between the earliest date at which the invention became possible and the invention’s realization was 10 years or less. Since 1900, the fraction rose from ~50 to 75%.

How much earlier could major inventions plausibly have appeared?

Core argument: Of 166 major inventions for which Claude Opus 4.7 estimated a date, 107 (64%) had an "earliest plausible" invention date within 50 years of the actual date, and 150 (90%) had an "earliest straightforward" date within that window.

I used a list of 190 major inventions. For each invention, I asked Claude Opus 4.7 how much earlier it could have been invented. The graph shows how much earlier, on average, each invention could have appeared for both the “earliest plausible” and “earliest straightforward” date ranges. We can clearly see a few trends on this graph. One is that for most inventions, the gap between when they could have been invented and when they were actually invented is not particularly large. Of the 166 inventions Claude estimated a date for, 107 of them (64%) had an “earliest plausible” date 50 years or less from the actual date, and 150 of them (90%) had an “earliest straightforward” date 50 years or less from the actual date. For more than half the inventions, the average earliest straightforward date of invention was 10 years or less from the actual date.

Takeaways by Macro Roundup® AI

  1. Of 166 major inventions for which Claude Opus 4.7 estimated a date, 107 (64%) had an "earliest plausible" invention date within 50 years of the actual date, and 150 (90%) had an "earliest straightforward" date within that window.
  2. For more than half of the inventions assessed, the average "earliest straightforward" date of invention was 10 years or less from the actual date of invention.
  3. Asking Claude Opus 4.7 how much earlier each of 190 major inventions could have been invented suggests that for most inventions the gap between the earliest possible and actual date is not particularly large.

Related Articles:

  • 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.
  • Never Enough: Dynamic Status Incentives in Organizations — Data on over 5,000 German fighter pilots show performance rose markedly as pilots approached the eligibility threshold for each medal in a tiered awards ladder and slumped immediately after receiving it, with the effect repeating at each successive rung. The authors estimate the ladder added 3,000–5,000 aerial victories, 5–10% of the total.
  • Are Ideas Getting Harder to Find? — The authors estimate U.S. research productivity has fallen by a factor of 41 since the 1930s, averaging declines above 5% per year across sectors. Sustaining constant growth in output per person requires doubling research effort every 13 years, challenging growth models that assume constant research productivity.

AI Summary. The share of men aged 16 and over who are employed has fallen from a 1990s average of 70.9% to 64.1%, partly reflecting an aging population, while women's employment share has held up better at 54.5%. Healthcare and social assistance, where women outnumber men three to one, drove recent private-sector job gains.

Justin Lahart Wall Street Journal
Date Posted:
Is Database:
Database

Since December 2024, male employment, as measured by US payrolls, has declined by ~1,000 workers, while the number of jobs held by women increased by ~421,000. This measure doesn’t capture the self-employed, who are disproportionately men.

Is men's employment falling faster than women's as healthcare drives hiring?

Core argument: The employment-to-population ratio for men aged 16 and over was 64.1% in April, down from a 2019 average of 66.6% and a 1990s average of 70.9%, a decline largely explained by an aging population with more male retirees.

Among men aged 16 and over, the employment-to-population ratio was 64.1% in April. That compared with an average of 66.6% in 2019, and 70.9% in the 1990s. A lot of that decline can be explained by an aging population: There are a lot more male retirees than there used to be. The share of women working has always been lower than men’s, but it has held up much better despite an aging population. Women’s employment-to-population ratio came to 54.5% in April, a bit below its 2019 and 1990s averages. More recently healthcare and social assistance, where women outnumber men three to one, has been the main bright spot in a dimming job market. The sector added 656,500 jobs over the year that ended in April, the Labor Department reported Friday. Absent that gain, the private sector would have shed 145,500 private-sector jobs. Among the sectors where employment has fallen over the past year: manufacturing, which has resumed its long decline after a brief, postpandemic pop, and which employs more than two men for every woman.

Takeaways by Macro Roundup® AI

  1. The employment-to-population ratio for men aged 16 and over was 64.1% in April, down from a 2019 average of 66.6% and a 1990s average of 70.9%, a decline largely explained by an aging population with more male retirees.
  2. Women's employment-to-population ratio came to 54.5% in April, a bit below its 2019 and 1990s averages, holding up better than men's despite an aging population.
  3. Healthcare and social assistance, where women outnumber men three to one, added 656,500 jobs in the year ended April, without which the private sector would have shed 145,500 jobs, the Labor Department reported.

Related Articles:

  • What Sweeping Revisions and a Blowout Month Tell Us About the U.S. Job Market — Labor Department revisions lowered previously estimated job gains for the past two calendar years, cutting the combined net change in construction, manufacturing, and retail by 115,000 jobs. Healthcare added about 437,000 jobs and social assistance about 321,000 over 12 months, while all other private-sector jobs combined shrank.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • Bachelors Without Bachelor’s: Gender Gaps in Education and Declining Marriage Rates — Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men declined, with the overall decline in marriage driven almost entirely by fewer marriages between non-college women and non-college men. The education gap in women's marriage rates is larger in areas where non-college men face the highest joblessness and incarceration.

AI Summary. The number of 18-year-olds in the US is peaking at a record high and is projected to fall 14% over the next decade.

Torsten Sløk Apollo
Date Posted:
Is Database:
Database

The number of American 18-year-olds will peak this year and fall 14% over the next decade.

Is the number of 18-year-olds in the US peaking?

Core argument: The number of 18-year-olds in the United States is projected to peak this year at a record high and then fall 14% over the coming decade.

America is at peak 18, and the number of 18-year-olds will fall 14% over the coming decade.

Takeaways by Macro Roundup® AI

  1. The number of 18-year-olds in the United States is projected to peak this year at a record high and then fall 14% over the coming decade.

Related Articles:

  • Can A Depopulating America Still Flourish? — US labor force participation among women aged 25-54 has reached all-time highs, exceeding its previous 1999 peak, yet remains over 4 points below Europe's level and nearly 6 points below Japan's. About 3.5m prime-age American women are neither working nor looking for work, without children at home or husbands, compared with roughly 7m such men.
  • The Happiness Crash of 2020 — Survey data show that after 2020 self-reported happiness fell across groups, compressing pre-existing differences — the black-white gap narrowed from 14 points to 6 — while the marital happiness premium of more than 30 points survived intact. Confidence in major public and private institutions declined nearly across the board, with double-digit drops common and losses spanning all parties and ideologies.
  • The Demographic Outlook: 2026 to 2056 — The Congressional Budget Office projects the US population rises from 349m to 364m between 2026 and 2056, with annual growth slowing from 0.3% over the next decade to 0.1% thereafter before reaching zero and then shrinking. Declining fertility is projected to push deaths above births starting in 2030, increasingly offsetting net immigration.

AI Summary. China's economy is smaller than many Western economists predicted, with per capita gross domestic product adjusted for purchasing power differences less than one-third of the U.S. level. Total social expenditures, estimated at around 9% of gross domestic product, are roughly in line with countries such as Mexico and Turkey and less than half the levels of many rich countries.

Brian Spegele Wall Street Journal
Date Posted:
Is Database:
Database

Rhodium finds that property and residential construction represented 11% of China’s GDP in 2025, down from 16% in 2023. Output in strategic sectors rose 1pp to 6.3% of GDP over that period, and as of 2024, defense spending has risen to 7% of GDP.

Is China's economy smaller and less generous than Western economists expected?

Core argument: China's per capita GDP was less than one-third of the U.S. level in 2024 even after adjusting for purchasing power differences, and its economy is smaller than many Western economists predicted when Xi Jinping took over.

Since the death of Mao Zedong, China’s leaders have largely focused on growth, which has fueled the nation’s economic rise. These days, political messaging often conflicts with economic reality. Farmers living off a few dollars a day are urged to make China a great power in agriculture. Students memorize Xi quotes about restoring China’s greatness, though millions are likely to end up unemployed and relying on their parents. China’s economy is smaller than many Western economists predicted it would be when Xi took over. Even when adjusting for purchasing power differences between the two countries, China’s per capita gross domestic product was less than one-third the size of the U.S.’s in 2024. While China has boosted its pension system and some other social programs during Xi’s time in office, total social expenditures—estimated at around 9% of GDP as of 2023—are roughly in line with countries such as Mexico and Turkey. They are less than half the levels of many rich countries.

Takeaways by Macro Roundup® AI

  1. China's per capita GDP was less than one-third of the U.S. level in 2024 even after adjusting for purchasing power differences, and its economy is smaller than many Western economists predicted when Xi Jinping took over.
  2. China's total social expenditures, estimated at around 9% of GDP as of 2023, are roughly in line with Mexico and Turkey and less than half the levels of many rich countries, despite Xi-era expansions to pensions and some social programs.
  3. Political messaging in Xi's China often conflicts with economic reality: farmers living on a few dollars a day are urged to make China a great power in agriculture, and students memorize Xi quotes though millions are likely to end up unemployed and relying on their parents.

Related Articles:

  • China’s Economy: Rightsizing 2025, Looking Ahead to 2026 — The authors argue China's official growth figures are inconsistent with ten consecutive quarters of deflation, estimating that real GDP is around 11% below official levels, with most of the adjustment in investment. That would imply a drop of roughly 9 percentage points in China's share of global investment, helping explain its export surge.
  • Imbalances Are Back On The Global Agenda — 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.
  • How China Is Outperforming the United States in Critical Technologies — The Australian Strategic Policy Institute's Critical Technology Tracker finds China leads in 57 of 64 critical technology categories while the United States leads in 7, and that China surpasses the United States in top-tier scientific publications across all 8 technology domains. In energy and environment China accounts for 46% of top-tier publications versus 10% for the United States.

AI Summary. China's first-quarter marriage registrations fell 6.24% from a year earlier to 1.697m couples, the lowest first-quarter total since 2020, while divorces edged down 1.27% to 622,000. The decline comes as China contends with a falling birth rate and a shrinking population.

Sylvia Ma South China Morning Post
Date Posted:

~1.7mm marriages in China took place in Q1, down ~6% y/y, falling to their lowest level since the pandemic period. Q1 is typically the peak season for marriages due to the Chinese New Year holiday.

Are China's marriages still falling as its population shrinks?

Core argument: China recorded 1.697 million marriage registrations in the first quarter, down 6.24% from a year earlier and the lowest first-quarter total since 2020, when 1.557 million couples registered during the first wave of Covid-19 lockdowns, according to Wind.

China’s first-quarter marriage registrations fell to their lowest level for the same period since 2020, as the country continued to grapple with persistent demographic challenges amid a declining birth rate and a shrinking population. In the first three months of this year, 1.697 million couples in China tied the knot, down 6.24% from the same period last year. The figure marked the lowest first-quarter total since 2020, when 1.557 million couples registered to marry amid the country’s first wave of Covid-19 pandemic lockdowns, according to financial data provider Wind. The first quarter is typically a peak season for marriages in China due to the Chinese New Year holiday. The number of divorces in the first quarter also edged down 1.27% from a year earlier to 622,000.

Takeaways by Macro Roundup® AI

  1. China recorded 1.697 million marriage registrations in the first quarter, down 6.24% from a year earlier and the lowest first-quarter total since 2020, when 1.557 million couples registered during the first wave of Covid-19 lockdowns, according to Wind.
  2. The first quarter is typically a peak season for marriages in China because of the Chinese New Year holiday.
  3. Chinese divorces in the first quarter fell 1.27% from a year earlier to 622,000, as the country continued to grapple with a declining birth rate and a shrinking population.

Related Articles:

  • The Power of Demography and the Fate of East Asia — East Asia's total population has peaked and is projected to decline for at least a generation, with the pace of decline likely accelerating each decade, while US population is projected to keep growing for decades. The author argues such sustained divergence can shift the global balance of power.
  • 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.
  • China Says Hostile Foreign Forces Are Driving Its Youth to Slack Off — 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.

Tuesday, May 12, 2026

AI Summary. America's post-2019 productivity acceleration came largely from professional services and management—about 10% of output and heavy users rather than producers of new technology—and from oil and gas. The information industry grew productivity around 6% annually, no faster than its 2000-19 average, with its output share steady at 5.3–5.5%.

Economist Staff The Economist
Date Posted:
Is Database:
Database
Is Important:
Important

The 2019–2024 uptick in US productivity wasn’t driven by the information sector, whose growth and scale is on par with its 2000–2019 mean, but rather by professional services and management, which together make up ~10% of the economy.

Which industries are driving America's recent productivity acceleration?

Core argument: America's "information" industry, spanning software, telecoms, publishing and film-making, led productivity growth at roughly 6% a year in 2019–2024, no higher than its 2000–2019 annual average.

Between 2019 and 2024 the “information” industry—which covers areas from software and telecoms to publishing and film-making—came top with an annual rate of around 6%. That was no higher than the annual average in 2000-19. Nor is America’s recent uptick the consequence of this particularly efficient industry accounting for a bigger slice of the economy: in the past six years the sector’s share of total American output has hovered between 5.3% and 5.5%. Instead, some of the biggest jumps in productivity growth have come in professional services and management. Together, these make up around 10% of the American economy, up a little from 2019. They are the sorts of businesses that do not produce new technology, but are voracious users of it. Productivity growth also sped up in oil and gas. The shale-fracking revolution of the 2010s turned America from a net energy importer to an exporter. In 2023 it sold half as much energy abroad, net of imports, as Saudi Arabia. Since then, construction of new liquefaction plants for natural gas has allowed America to send the fuel to Europe and Asia, where it fetches higher prices than at home.

Takeaways by Macro Roundup® AI

  1. America's "information" industry, spanning software, telecoms, publishing and film-making, led productivity growth at roughly 6% a year in 2019–2024, no higher than its 2000–2019 annual average.
  2. The information sector's share of total American output stayed between 5.3% and 5.5% over the past six years, so the productivity uptick did not come from that industry taking a larger slice of the economy.
  3. Some of the biggest productivity jumps came in professional services and management—about 10% of the American economy, up a little from 2019—which use technology heavily rather than produce it, and in oil and gas.

Related Articles:

  • Killer Incentives: Status Competition and Pilot Performance during World War II — Analysis of over 5,000 German World War II fighter pilots finds that public peer recognition was associated with higher victory scores among skilled pilots without higher mortality, while average pilots gained little in victories but died at higher rates. The authors conclude status-based awards can have uneven effects in high-risk settings.
  • 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.
  • An AI Productivity Boom? Don’t Count Your (Productivity Data) Chickens — Measured productivity can rise from compositional effects when lower-wage, lower-productivity workers leave the labor force, as happened during Covid and 2009, and immigration policy changes could produce a similar effect. Much of the recent productivity boost appears to come from capital utilization tied to increased investment in AI rather than workers becoming more productive using AI.

AI Summary. US growth in GDP per capita has outpaced Europe's on conventional measures, yet European relative GDP per capita measured at purchasing power parity has not fallen. A model in which the US produces all technology output, and technology alone enjoys productivity growth, generates rising US real GDP at chained constant prices while relative GDP at current prices stays unchanged.

Paul Krugman Krugman Wonks Out
Date Posted:
Is Database:
Database
Is Important:
Important

Krugman presents an example in which US and European output growth diverge, yet relative GDPs in purchasing power terms remain constant, as the drop in the relative price of tech goods enriches Europe, even though its own output remains constant.

Why has US growth outpaced Europe's without changing relative purchasing-power income?

Core argument: Conventional measures show US GDP per capita growth outpacing Europe's since 2000, yet European relative GDP per capita measured at purchasing power parity has not declined — the US-Europe paradox.

Conventional measures of growth in GDP per capita have favored the United States since 2000. But European relative GDP per capita measured at PPP has not declined. Call all this the US-Europe paradox. Of course, it isn’t really a paradox. It makes perfect sense given US dominance of sectors that are experiencing rapid productivity growth, which leads to a rise in relative US GDP at constant prices but doesn’t translate into a rise in relative GDP at current prices. I assume that the US has a comparative advantage in T [Tech], and hence that all T is produced there. T experiences more rapid technological progress than N [nontech]. I assume that productivity in that sector rises at a rate ⍴, versus zero in N. Given these assumptions, what does the model imply for measured growth and relative performance? The model implies that all T will be concentrated. Because T attracts a share 𝜏 of world spending, it will also account for a share 𝜏 of world GDP, and hence 2𝜏 of US GDP. Given this, technological progress in T implies rising US real GDP, measured the way we actually calculate it — as growth in “chained” constant prices — at a rate of 2𝜏𝜌. Growth in EU real GDP is zero. Yet relative GDP at current prices remains 1.

Takeaways by Macro Roundup® AI

  1. Conventional measures show US GDP per capita growth outpacing Europe's since 2000, yet European relative GDP per capita measured at purchasing power parity has not declined — the US-Europe paradox.
  2. The model assumes the United States holds a comparative advantage in tech and produces all of it, with tech productivity rising at rate ⍴ while nontech productivity growth is zero.
  3. The model implies US real GDP in chained constant prices grows at twice tech's share of world spending times ⍴ while EU real GDP growth is zero, yet relative GDP at current prices remains 1.

Related Articles:

  • Is Europe in Economic Decline? — French gross domestic product per person, adjusted for purchasing power, was 74% of the US level in 2001 and 73% in 2024, while Germany closed some of the gap, indicating European living standards have not fallen behind. Higher measured US growth is attributed to rapid productivity growth in information technology, a sector the US dominates.
  • 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.
  • The Two Europes — The International Monetary Fund projects Eastern European economies will close much of the gap with US per capita GDP — Poland from 34% to 67%, Romania 27% to 60%, Lithuania 29% to 69% — while Western Europe slips, with France falling from 86% to 71% and Italy from 93% to 68%.

AI Summary. A closed-end fund holding small private stakes in OpenAI, SpaceX, and Anthropic has more than doubled in under two weeks and trades at nearly triple its last reported net asset value. The author argues this reflects investor appetite for any exposure to pre-IPO artificial intelligence companies, which will pull money out of other assets.

Paul Kedrosky Notes on Complexity
Date Posted:

Public vehicles holding private market shares in Anthropic are “going parabolic.” Kedrosky notes the sum of SpaceX’s, OpenAI’s and Anthropic’s gross valuations at IPO may now be above $5T.

Will demand for pre-IPO AI exposure draw money out of other assets?

Core argument: DXYZ, a closed-end fund holding modest stakes in private tech companies including OpenAI, SpaceX, and Anthropic, has more than doubled over ten days and rose 30% in a single session.

Public vehicles holding private market shares in Anthropic are going parabolic. Case in point, DXYZ, a closed-end fund holding various private tech companies, including OpenAI, SpaceX, and Anthropic, albeit in modest percentages. The fund's stock has more than doubled in the last ten days, and is up 30% today alone. While it seems likely was partly a short squeeze on a closed-end fund whose price was almost triple (!) its last posted net asset value, it's also the fervor for any exposure whatsoever to pre-IPO AI companies, in particular the Anthropix troika. This will only get more dramatic in the coming weeks and months. Money will increasingly flood out of a host of financial nooks and crannies, and into anything with any connection to what's coming. The money has to come from somewhere, the appetite is immense.

Takeaways by Macro Roundup® AI

  1. DXYZ, a closed-end fund holding modest stakes in private tech companies including OpenAI, SpaceX, and Anthropic, has more than doubled over ten days and rose 30% in a single session.
  2. The author attributes DXYZ's surge partly to a short squeeze in a closed-end fund trading at nearly triple its last posted net asset value, and partly to investor fervor for any exposure to pre-IPO AI companies.
  3. The author argues money will increasingly flow out of other financial holdings into anything connected to the coming AI listings, putting the potential "AnthroPix" effect at $5 trillion or more.

Related Articles:

  • The Coming Mega-IPO Flow & Funding Problem of 2026 — 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.
  • 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.

AI Summary. The authors use the end of UK sugar rationing as a natural experiment and estimate that a sugar-rich early-childhood diet raised adult chronic inflammation, diabetes, cholesterol and arthritis, and led to less human capital, lower odds of a skilled occupation, and less wealth. They also find early exposure elevated sugar consumption across the lifespan.

Paul Gertler and Tadeja Gračner Working Paper
Date Posted:
Is Database:
Database

Using a regression discontinuity design exploiting the end of sugar rationing in September 1953, Gertler and Gračner find that birth cohorts post-dating the policy change experience worse lifetime outcomes in many health measures as well as economic success.

Does a sugar-rich early childhood diet worsen adult health and wealth?

Core argument: Using the end of UK sugar and sweets rationing in 1953 as a natural experiment, the authors find that early-childhood exposure to a sugar-rich diet increased adult chronic inflammation, a marker of chronic disease.

We study the long-term effects of exposure to a sugar-rich diet in early childhood on health and economic well-being in later adulthood, and identify diet as a possible pathway. We exploit the end of sugar and sweets rationing in 1953 in the UK as a natural experiment inducing variation in exposure to a sugar-rich diet in early childhood. We find that the end of rationing increased the adult prevalence of chronic inflammation, an important marker of chronic disease. We also find increases in poor metabolic health; particularly diabetes, cholesterol and arthritis. Finally, we find that excessive intake of sugar also results in worse economic outcomes; specifically, in reduced human capital accumulation, a lower likelihood of having a skilled occupation, and a lower accumulation of wealth. While the effects of a sugar-rich diet early in life may have affected these outcomes directly via physiological programming, we find that a sugar-rich diet early in life elevated free sugar consumption across lifespan, consistent with evidence that life-long dietary preferences and habits form early, and that sugar may be addictive.

Takeaways by Macro Roundup® AI

  1. Using the end of UK sugar and sweets rationing in 1953 as a natural experiment, the authors find that early-childhood exposure to a sugar-rich diet increased adult chronic inflammation, a marker of chronic disease.
  2. The authors find that early-childhood exposure to a sugar-rich diet raised the prevalence of poor metabolic health in later adulthood, particularly diabetes, cholesterol and arthritis.
  3. Early exposure to a sugar-rich diet is associated with worse economic outcomes — reduced human capital accumulation, a lower likelihood of holding a skilled occupation, and lower wealth accumulation — and with elevated free sugar consumption across the lifespan.

Related Articles:

AI Summary. Sweden has opened public services to private providers, with nearly half of primary healthcare clinics privately owned and one in three public high schools privately run, up from 20% in 2011. Its public social spending has fallen to 24% of GDP, similar to the US and below the over 30% in France and Italy.

Tom Fairless Wall Street Journal
Date Posted:
Is Database:
Database

Swedish public social spending is now 23.7% of GDP, just 1pp above that of the US and well under France’s 31.6%. Market-based reforms in the 1990s brought overall government spending down from 69.4% to 49.3% in 2024.

How has Sweden shrunk its state by privatizing public services?

Core argument: Sweden's total public social spending, covering healthcare, education and welfare payments, has fallen to 24% of GDP, similar to the U.S. and well below the over 30% of nations like France and Italy.

For decades, Sweden was shorthand for the brand of high-tax, high-spend government that managed people’s lives from cradle to grave through state-run hospitals, schools and care homes. No longer. With little fanfare, this Nordic country of 11 million has embraced capitalism. Today, nearly half of primary healthcare clinics are privately owned, many by private-equity firms. One in three public high schools is privately run, up from 20% in 2011. School operators are listed on the stock exchange. The capitalist makeover has allowed Sweden to do what few industrialized countries have managed in recent years: shrink the size of the state. That has enabled the government to sharply lower taxes and, economists say, sparked a surge in entrepreneurship and economic growth. Its total public social spending bill—which includes healthcare, education and all welfare payments—has fallen to 24% of gross domestic product, similar to the U.S. and well below the over 30% for nations like France and Italy. Sweden’s economy is expected to grow by around 2% a year through 2030, roughly the same pace as the U.S. and double the growth rates of France and Germany, according to an April forecast by the International Monetary Fund.

Takeaways by Macro Roundup® AI

  1. Sweden's total public social spending, covering healthcare, education and welfare payments, has fallen to 24% of GDP, similar to the U.S. and well below the over 30% of nations like France and Italy.
  2. Nearly half of Sweden's primary healthcare clinics are privately owned, many by private-equity firms, and one in three public high schools is privately run, up from 20% in 2011, with school operators listed on the stock exchange.
  3. An April forecast by the International Monetary Fund projects Sweden's economy will grow around 2% a year through 2030, roughly matching the U.S. and double the growth rates of France and Germany.

Related Articles:

  • How Sweden Overcame Socialism — After government spending reached 70% of GDP and public debt 80% of GDP, Sweden adopted market-oriented reforms including privatized healthcare services, for-profit schools, reduced welfare benefits, deregulation of electricity and transportation, and a corporate tax cut from 28% to 22%. Public debt has since fallen to 41% of GDP, with growth outpacing European Union peers by roughly 1 point annually.
  • Reforming the Welfare State: Recovery and Beyond in Sweden — Sweden's structural reforms — flexible exchange rates, inflation targeting, a smaller public sector, less generous social insurance, and deregulated markets — accompanied export-led growth, a current account surplus lasting over a decade, government spending falling to 52% of GDP, and central government debt dropping from nearly 80% of GDP to about half that.
  • The US Has One of the Highest Fertility Rates Among Peer Countries — The tempo-adjusted fertility rate, which accounts for shifts in the timing of births, shows the US rate falling since roughly 2009-10 and dropping below the 2.1 births-per-woman replacement level around 2017, reaching 1.82 in 2022. The US decline is less severe than in many peer countries.

AI Summary. US consumer prices rose 3.8% from a year earlier, driven by higher gasoline and grocery costs, according to the Bureau of Labor Statistics. Inflation outpaced wage growth, leaving inflation-adjusted wages lower than a year earlier for the first time in three years.

Mark Niquette Bloomberg
Date Posted:

Real wages fell for the first time in three years as headline CPI rose 3.8% y/y in April, reaching its highest level since spring 2023. Core rose 2.8% y/y.

Is inflation now outpacing wage growth?

Core argument: The US consumer price index rose 3.8% from a year earlier in April, the most since 2023, according to Bureau of Labor Statistics data.

US inflation accelerated in April on rising gasoline and grocery costs, exceeding wage growth in a double-whammy for already strained consumers. The consumer price index rose 3.8% from a year earlier, according to Bureau of Labor Statistics data out Tuesday, the most since 2023. After adjusting for inflation, wages fell for the first time in three years.

Takeaways by Macro Roundup® AI

  1. The US consumer price index rose 3.8% from a year earlier in April, the most since 2023, according to Bureau of Labor Statistics data.
  2. April's inflation acceleration reflected rising gasoline, grocery and rent costs, and it exceeded wage growth, straining consumers already under pressure.
  3. Inflation-adjusted wages fell in April for the first time in three years, according to Bureau of Labor Statistics data.

Related Articles:

  • A Q&A on Our Economic Forecasts Amid the Evolving War with Iran — The authors forecast that the drag on US growth from higher oil prices will roughly offset the boost from recent tax cuts, and have lowered their GDP growth projection by 0.5 percentage points to 2.0%. Their baseline now runs about half a percentage point below estimated potential growth, with adverse scenarios three-quarters to a full point below.
  • 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.
  • 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.