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
  • “…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 provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “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
  • “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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, July 2, 2026

AI Summary. The Economist's summer barbecue index, tracking ten cookout staples across 25 American cities, finds the basket costs an average of $81, 12% more than a year earlier and the fastest annual increase in a decade. That outpaced grocery-price inflation of less than 3%, reflecting unusually sharp price increases in several barbecue items.

Economist Staff The Economist
Date Posted:

A market basket for a summer BBQ in the US has risen 12% y/y, according to an Economist analysis. Meat prices were the dominant factor. Overall grocery prices rose only 3%.

How much have cookout staple prices risen compared with grocery inflation?

Core argument: The Economist's summer barbecue basket of ten cookout staples costs an average of $81 across 25 American cities, 12% more than a year ago, the fastest annual increase in a decade.

To calculate the bill, The Economist has created a summer bbq Index, tracking ten cookout staples in 25 American cities. Our basket should feed four hungry adults and includes protein (1.5 pounds, or 675g of rib-eye steak, two pounds of ground beef and of frying chicken, and a pack of pork sausage), carbs (two pounds of potatoes, a big bag of potato crisps, which Americans insist on calling chips, and a loaf of bread), beverages (a 64-ounce, or two-litre, bottle of Coke and a six-pack of beer) and lettuce. Using prices gathered by the Council for Community and Economic Research, a think-tank, we then compared the cost of our basket with median hourly pay in each metro area to see how long the typical worker must toil to afford it all. The index offers an unappetising conclusion. Across the 25 cities in our sample, the basket now costs an average of $81, 12% more than a year ago, the fastest annual increase in a decade. That far outpaced grocery-price inflation of less than 3%, reflecting the unusually sharp increases in several items in our barbecue basket.

Takeaways by Macro Roundup® AI

  1. The Economist's summer barbecue basket of ten cookout staples costs an average of $81 across 25 American cities, 12% more than a year ago, the fastest annual increase in a decade.
  2. The barbecue basket's 12% price rise far outpaced grocery-price inflation of less than 3%, reflecting unusually sharp increases in several items in the basket.
  3. The Economist built its index using prices gathered by the Council for Community and Economic Research and compared the basket's cost with median hourly pay in each metro area to gauge how long a typical worker must work to afford it.

Related Articles:

  • What’s at Stake for Beef as Flesh-Eating Screwworm Cases Exceed Two Dozen — Screwworm infections have been confirmed in more than two dozen animals, including cattle, sheep, goats and a dog, threatening Texas, which produces roughly 14% of US beef supply. The outbreak comes with the US cattle herd at its lowest level in generations and beef prices at or near record highs.
  • Gas Prices Wipe Out More Than a Year of Wage Gains — Rising gasoline prices have pushed average hourly earnings 0.7% below their year-earlier level after adjusting for inflation, erasing more than a year of wage gains. Inflation eroding wage increases is one reason consumer sentiment sits near record lows despite relatively low unemployment and a strong stock market.
  • Do Voters Punish Inflation or Pay Cuts? Inflation and Real Wages in U.S. Elections — An analysis of U.S. counties estimates that where wages grew faster than prices, voters supported the incumbent party more, while counties with larger real wage losses than average shifted more toward the opposition. A one-standard-deviation larger real wage loss is associated with shifts of roughly 0.10 and 0.19 percentage points in vote share and margin.

AI Summary. OpenAI has discussed giving the US government a 5% stake in the $852bn company, with the proposed arrangement extending to similar stakes in other US artificial intelligence firms, as the company seeks financial buy-in from the administration to clear political obstacles.

Cristina Criddle and George Hammond Financial Times
Date Posted:

OpenAI is considering giving the USG a 5% stake in the firm. OpenAI’s proposal would “involve other US AI companies handing over a similar stake.”

Are AI companies offering the government equity stakes to clear political obstacles?

Core argument: OpenAI has discussed handing a 5% stake to the US government, as the $852bn AI start-up seeks to clear political obstacles by securing financial buy-in from the Trump administration.

OpenAI has discussed giving a 5% stake to the US government as the $852bn AI start-up seeks to clear political obstacles by securing financial buy-in from the Trump administration. The proposed arrangement would involve other US AI companies handing over a similar stake, although it is not clear if the other labs would be willing to do so. Altman has been in active talks with the administration about the issue of public ownership, including Trump, Commerce Secretary Howard Lutnick, and Treasury Secretary Scott Bessent, according to multiple people familiar with the matter. The OpenAI chief has also spoken to Democratic Senator Bernie Sanders in recent weeks. Sanders has pushed for public ownership of closer to half of each US AI company through a sovereign wealth fund.

Takeaways by Macro Roundup® AI

  1. OpenAI has discussed handing a 5% stake to the US government, as the $852bn AI start-up seeks to clear political obstacles by securing financial buy-in from the Trump administration.
  2. The proposed arrangement would involve other US AI companies handing over similar stakes, though it is unclear whether the other labs would be willing to do so.
  3. Sam Altman has discussed public ownership with Trump, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, and with Democratic Senator Bernie Sanders, who has pushed for public ownership of closer to half of each US AI company through a sovereign wealth fund.

Related Articles:

  • OpenAI Leans Toward Waiting Until Next Year for I.P.O. — OpenAI is leaning toward delaying its initial public offering until next year, according to people involved in the company's deliberations. Advisers have cautioned that retail investor enthusiasm may be limited, following a decline in SpaceX's stock after its public offering and choppy markets in which technology stocks have dragged down indexes.
  • OpenAI Isn’t Yet Working Toward an IPO, CFO Says — OpenAI is seeking backing from banks, private equity, and potentially governments to help guarantee financing for AI chips, arguing such guarantees could lower borrowing costs and raise the amount of debt it can take on. The company expects to spend roughly $600bn on computing power from Oracle, Microsoft, and Amazon.
  • AI: The ROI Runway Could Be Long Outside the Tech Sector — AI company valuations rest on the assumption that profit margins across non-tech firms will eventually rise, but outside a handful of sectors adoption is slow, creating a divergence between front-loaded valuations and slower cash flows. If the per-use costs of AI models converge toward zero, revenue may be insufficient for all major cloud providers.

AI Summary. US technology and finance firms offer new engineering graduates higher pay and greater prestige than large industrial companies like Boeing, whereas engineering graduates in France, Japan, China, and Germany take industrial jobs such as Airbus at a fraction of US engineering pay. The author argues this talent pull is a genuine obstacle to re-industrializing the US.

Louis-Vincent Gave Gavekal
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Louis-Vincent Gave notes that while “Airbus can hire the cream of the French, or even European, crop,” established American industrial firms like Boeing may struggle to attract engineering talent due to competition from startups and Wall Street.

Does tech and finance pay pull engineering talent away from US industry?

Core argument: Engineering graduates in France, Japan, China, and Germany take jobs at industrial firms such as Airbus for a fraction of US engineering pay, while US graduates target Google, Microsoft, Meta, Goldman Sachs, or Morgan Stanley.

Shifts in staff compensation stacked the decks against Boeing and other big US industrial companies—at least relative to other industrial powers. In France, for example, graduates of engineering schools will gladly take jobs at Airbus and be paid a fraction of what an engineer makes in the US. The same is true in Japan, China, and Germany. In the US, however, a new engineering graduate today likely has his or her sights on a job at Google, Microsoft, or Meta, or alternatively at Goldman Sachs or Morgan Stanley. Such jobs offer better pay and more social prestige, along with the promise of stock options and potential riches. Now the SpaceX IPO has turned this dial all the way up to 11. In short, for the past 15 years or so, the US tech industry has sucked most of the oxygen out of the room. This is true for capital allocation and stock market performance, and it follows that the same has also been true for human resources and talent acquisition. This seems like a genuine hurdle to today’s widespread hopes of re-industrializing the US.

Takeaways by Macro Roundup® AI

  1. Engineering graduates in France, Japan, China, and Germany take jobs at industrial firms such as Airbus for a fraction of US engineering pay, while US graduates target Google, Microsoft, Meta, Goldman Sachs, or Morgan Stanley.
  2. US technology and finance jobs offer better pay and more social prestige than industrial employers, along with stock options and the promise of riches, shifting compensation against Boeing and other large US industrial companies.
  3. The US tech industry has drawn most capital allocation, stock market performance, and talent for roughly 15 years, and the SpaceX IPO intensifies that pull, posing a hurdle to hopes of re-industrializing the US.

Related Articles:

  • Military Officer Quality in the All-Volunteer Force — The authors find a steady decline in U.S. Marine Corps officers' General Classification Test scores, which is statistically associated with the expansion of college attendance and explains 96% of the measured change. They also find a positive association between African American officers and mean test scores, arguing affirmative action has not lowered officer quality.
  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.
  • Speed Can Reindustrialize America — The US has a relative surplus of low-paid hourly workers and a shortage of high-skill workers, so many less productive US manufacturers could buy a robot but could not attract the talent to program it. China faces the opposite conditions, with underemployed STEM graduates, residency rules complicating coastal factory hiring, and robot programmers earning a fraction of US wages.

AI Summary. Polling finds Democrats ahead in only two Republican-held Senate states — leading by 7 points in North Carolina and 2 in Maine — fewer than the four pickups needed to win the chamber. Republicans lead by 2 points in Alaska and Iowa and 3 in Ohio, with Texas tied, margins within the polls' sampling error.

Nate Cohn New York Times
Date Posted:

As of today, NYT polling suggests the Democrats’ standard-bearers are leading in two of six competitive Senate seats. Other than in NC, the results are within the margin of error. The Democrats need a net change of four seats to flip the chamber.

Do Democrats lead in enough Senate races to win the chamber?

Core argument: Polls show Democrats leading in only two Republican-held Senate states — North Carolina, where Roy Cooper is up seven points, and Maine, where Graham Platner is up two — short of the minimum of four they would need to win the chamber.

The polls find Democrats ahead in only two Republican-held states, less than the minimum of four they would need to win the chamber, with Roy Cooper leading by seven percentage points in North Carolina and Graham Platner leading by two in the previously reported poll of Maine. Republicans lead by two points in Alaska and Iowa and by three points in Ohio. The race in Texas is tied. It’s important to emphasize that the results of most of these races — including the three races where Republicans lead in the poll — are within the margin of error. The margin of sampling error among the likely electorate is plus or minus 4.8 percentage points in Maine, 4.5 percentage points in Texas, 4.9 percentage points in Alaska, and 4.7 percentage points in Iowa, North Carolina, and Ohio. The margin of sampling error when analyzing the states together is plus or minus 1.9 percentage points.

Takeaways by Macro Roundup® AI

  1. Polls show Democrats leading in only two Republican-held Senate states — North Carolina, where Roy Cooper is up seven points, and Maine, where Graham Platner is up two — short of the minimum of four they would need to win the chamber.
  2. Republicans lead by two points in Alaska and Iowa and by three points in Ohio, while Texas is tied, with all three Republican-leading races falling within the margin of error.
  3. The margin of sampling error among the likely electorate is plus or minus 4.8 points in Maine, 4.5 in Texas, 4.9 in Alaska, and 4.7 in Iowa, North Carolina and Ohio, and 1.9 points across the states combined.

Related Articles:

  • US Consumer Sentiment Picks Up on Easing Gasoline Prices — US consumer sentiment rose for the first time in four months as lower gasoline prices offered some relief from a surge in inflation, with the University of Michigan's preliminary sentiment index increasing to 48.9 from a record low of 44.8. The reading beat most economists' expectations but remains the second lowest in data going back to the 1970s.
  • Is The Vibecession Real — Or Is The Survey Broken? — The Index of Consumer Sentiment is distorted by an oversampling of Democrats and by a shift from telephone to online polling that made responses more negative, with partisan nonresponse and respondents using economic questions to express political views. Adjusting for both leaves sentiment historically low but not at Great Recession lows.
  • The Record Divide Between Corporate Profits and Worker Pay — Labor's share of gross domestic income fell to 51%, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950. Inflation-adjusted hourly wages are up 3% since the end of 2019, compared with a 50% rise in profits.

Monday, July 6, 2026

AI Summary. Analysis of US stock portfolios from 1971 to 2025 finds that "do-nothing" portfolios, which keep holding stocks even after they leave the S&P 500 index, on average match index returns, and equal-weighted versions outperformed market-cap-weighted ones before trading costs (14.02% vs 12.69% average 1-year returns). Portfolios built from the largest constituents underperformed those built from all constituents over the period.

Hendrik Bessembinder Arizona State University
Date Posted:

Over 1971–2025, the equal-weighted S&P 500, and similar portfolios with a larger small-cap tilt, returned 1 to 2pp more per year than the value-weighted S&P. “The outperformance of the largest stocks over the past dozen or so years is…atypical.”

Do buy-and-hold stock portfolios match index returns?

Core argument: Equal-weighted "do-nothing" portfolios returned an arithmetic mean of 14.02% over 1971–2025 versus 12.69% for value-weighted portfolios, with geometric means of 12.59% and 11.30% respectively, before trading costs.

I assess the impact during the 1971 to 2025 period of selecting portfolios based on equal-weighting versus value-weighting [i.e.weighting by market cap]. The data in Table 1 indicates that equal-weighted “do-nothing” portfolios outperform the value-weighted do-nothing portfolios overall. The arithmetic mean of 1-year-equal weighted portfolio returns is 14.02% while that of the value-weighted 1-year portfolio returns is 12.69%. The corresponding geometric mean returns are 12.59% for the equal-weighted portfolio compared to 11.30% for the value-weighted portfolio. “Do Nothing” portfolios, which continue to hold stocks even if they delist from the S&P 500 index, on average generate returns that match the index itself. On the other hand, equal weighted “Do Nothing” portfolios on-average outperformed value-weighted, at least before taking trading costs into account. Randomly selected narrow portfolios generate average returns similar to portfolios constructed from all constituent stocks, but underperform more than half of the time over longer holding periods. Strikingly, “Do Nothing” portfolios constructed from the largest S&P constituent firms have strongly underperformed portfolios constructed from all constituents over the past 55 years, especially when the investment is entirely in the largest stock. The outperformance of the largest stocks over the past dozen or so years is, in fact, atypical.

Takeaways by Macro Roundup® AI

  1. Equal-weighted "do-nothing" portfolios returned an arithmetic mean of 14.02% over 1971–2025 versus 12.69% for value-weighted portfolios, with geometric means of 12.59% and 11.30% respectively, before trading costs.
  2. "Do-nothing" portfolios that keep holding stocks after they exit the S&P 500 generate average returns matching the index itself.
  3. "Do-nothing" portfolios built from the largest S&P constituents strongly underperformed portfolios built from all constituents over the past 55 years, especially when the investment is entirely in the single largest stock.

Related Articles:

  • 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.
  • Opportunities and Expectations: The Present Value of Growth Opportunities in Valuation — A stock's value can be split into steady-state value from current operations and the "present value of growth opportunities" from future value-creating investments, which has averaged 35% of the S&P 500's price historically. Lower shares of price attributed to growth opportunities have been associated with higher subsequent returns, most clearly at the extremes.
  • Competitive Advantage Period: The Neglected Value Driver — Data indicate persistence in returns on invested capital has increased since 2000, with large companies the main beneficiaries; the information technology sector's aggregate return was 19% versus a 10.8% median from 1970 to 2024. Of about 13,800 U.S. public firms listing from 1976 to 2019, 18% survived.

AI Summary. Productivity growth from 2000-2019 was higher in the US than in western Europe, but almost half the gap disappears when information and communications technology is excluded, even though tech was 9.2% of US output versus 5.4% in the EU. The author estimates this difference in industrial mix accounts for roughly 40% of the overall productivity growth gap.

Paul Krugman Krugman Wonks Out
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The superior productivity growth of the US relative to Europe from 2000–2019 is highly concentrated in the tech sector. Krugman computes the productivity growth differential excluding ICT and finds that it shrinks from .65 to .38 per year.

How much of the US-Europe productivity gap reflects tech sector size?

Core argument: Productivity growth over 2000–2019 was higher in the US than in the EU11, essentially western Europe, but almost half of that gap disappears when the ICT sector is excluded.

The [Draghi] report states that, apart from the ICT [information, communication and technology] sectors in the EU and the US, productivity performance across the rest of the two economies has been similar. Chart 5 shows what I find for productivity growth rates from 2000-2019 in the US and the EU11, basically western Europe. Overall productivity growth was higher in the US than in Europe, but almost half the difference goes away if one excludes ICT, even though the tech sector was only 9.2% of US GDP and 5.4% of EU GDP. It’s worth noting that, within the US, productivity rose much faster in tech than in the rest of the economy. When trying to model the US-EU paradox, I focused on the difference in the share of GDP accounted for by the tech sector. As noted above, the productivity gap outside tech is relatively small. How much of the US-EU paradox can this story, which emphasizes differences in industrial mix, explain? Industrial mix effect = (Share of tech in US GDP – share of tech in EU GDP) * (productivity growth rate in tech – productivity growth rate in non-tech). If I plug in the US-EU difference in ICT share — 3.8 percentage points — and the difference within the US between productivity growth in ICT and in the rest of the economy — 6.8 percentage points — I get 0.26 percentage points, or approximately 40% of the reported overall US-EU difference in productivity growth.

Takeaways by Macro Roundup® AI

  1. Productivity growth over 2000–2019 was higher in the US than in the EU11, essentially western Europe, but almost half of that gap disappears when the ICT sector is excluded.
  2. The tech sector accounted for 9.2% of US GDP versus 5.4% of EU GDP, a 3.8-percentage-point difference, while US productivity growth in ICT exceeded that in the rest of the US economy by 6.8 percentage points.
  3. Multiplying the 3.8-point ICT share gap by the 6.8-point within-US productivity growth gap yields an industrial mix effect of 0.26 percentage points, roughly 40% of the reported overall US-EU productivity growth difference.

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.
  • European Stagnation Is Real — Comparing the United States, France, and Germany at current purchasing power parity prices shows the European economies roughly constant relative to America since 2000, but current-price measures miss output gains in sectors where prices fall, such as software. The author argues constant-price comparisons, the standard approach for growth over time, reveal greater European stagnation.
  • 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.

AI Summary. Emerging-market central bank reserve diversification into gold, following the freezing of Russia's reserves, anchors a forecast of $4,900 per troy ounce by end-2026, with risks skewed to the upside. Near-term headwinds include reduced demand for currency-debasement hedges and rate-sensitive exchange-traded fund demand if the Federal Reserve turns hawkish.

Samantha Dart, Daan Struyven, Lina Thomas, Yulia Zhestkova Grigsby, et al. Goldman Sachs
Date Posted:

Gold is up 123% since 2022. GS argues it still has room to run, due to EM central bank buying and private diversification driven by worries about Western fiscal sustainability. They have a price target of $4,900/toz by the end of 2026.

Does central bank reserve diversification support further gold price gains?

Core argument: Gold has risen 123% since 2022, and the authors forecast $4,900/toz by end-2026, anchored structurally by emerging-market central bank reserve diversification following the 2022 freezing of Russia's reserves.

Despite gold’s strong rally since 2022 (up 123%), we continue to see further upside, driven by both structural and eventually cyclical factors. Structurally, EM central bank diversification--following the 2022 freezing of Russia’s reserves--remains the anchor of our $4,900/toz end 2026 forecast. While the pace of central bank gold purchases has moderated to ~50 tonnes/month on a 3-month (seasonally adjusted) and 12-month moving average basis, we view the ongoing diversification trend as structural. Cyclically, however, gold faces near term headwinds from the potential hit to demand for macro policy hedges (as a hawkish Fed helps fade the debasement theme) and as markets are pricing in Fed hikes this year amid inflation concerns, weighing on rate-sensitive ETF demand. We expect these headwinds to at least partly reverse over time. Over the medium term, risks to our gold price forecast remain skewed to the upside on the net. Gold's share in private portfolios remains small, and the Iran episode -- together with broader geopolitical developments -- may eventually accelerate private diversification into gold, including by weighing on perceptions of Western fiscal sustainability.

Takeaways by Macro Roundup® AI

  1. Gold has risen 123% since 2022, and the authors forecast $4,900/toz by end-2026, anchored structurally by emerging-market central bank reserve diversification following the 2022 freezing of Russia's reserves.
  2. Central bank gold purchases have moderated to roughly 50 tonnes per month on both 3-month seasonally adjusted and 12-month moving average bases, a diversification trend the authors still view as structural.
  3. Gold faces near-term headwinds from a hawkish Federal Reserve fading the debasement theme and from markets pricing Fed hikes amid inflation concerns, weighing on rate-sensitive ETF demand.

Related Articles:

  • Gold Heads For Worst Quarter In More Than A Decade As Retail Frenzy Fades — Gold fell below $4,000 a troy ounce, down nearly 14% over three months, its worst quarterly performance in more than a decade after reaching a record high near $5,595. Analysts attribute the decline to expectations of US interest rate rises, outflows from gold-backed funds, traders shifting into AI stocks, and Chinese bank restrictions on retail bullion trading.
  • The Debasement Trade Is Unraveling and Kevin Warsh Is One Big Reason — The "debasement trade" — favoring gold and Bitcoin over a dollar seen as vulnerable to inflationary, fiscal and monetary excess — has been a defining market narrative, but a new Federal Reserve chairman's emphasis on price stability as the overriding priority lifted the dollar and long-dated Treasuries at the expense of gold and crypto.
  • Global Debt Report 2026 — Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.

AI Summary. Mitsubishi Heavy Industries argues that car factories, built to produce large volumes of identical units, are ill-suited to military drones, whose specifications change constantly, while its own expertise lies in low-volume, high-variation production. The company says data security concerns will push Japan's defence ministry to source some drones domestically without international partners.

Harry Dempsey Financial Times
Date Posted:

Mitsubishi Heavy’s CEO argues that pivoting automotive manufacturing capacity to drones risks producing large numbers of quickly obsolete drones. “Products in this field change their specifications constantly depending on the situation.”

Can car factories be converted to build military drones?

Core argument: Mitsubishi Heavy Industries developed an interceptor drone prototype capable of destroying enemy unmanned aerial vehicles in three months, drawing on its expertise in satellites, command and control systems, and submarines.

Eisaku Ito, chief executive of Mitsubishi Heavy Industries, believes the firm's drone business would grow to a “considerable scale.” He argues the firm could become Japan’s premier drone supplier because it specialised in producing low volumes with high levels of variation. "Products in this field change their specifications constantly depending on the situation. Automobile factories, by contrast, are designed to manufacture tens of thousands or millions of the same units." The defence ministry would want Japan to develop and make some drones without international partners because of data security concerns, Ito said, giving MHI an advantage. “We’re the only company in Japan that can handle this comprehensively,” he said, referring to its ability to produce military kit covering sea, land, and air. In just three months, MHI recently developed an interceptor drone prototype that can take out enemy unmanned aerial vehicles, drawing on its expertise in satellites, command and control systems, and submarines.

Takeaways by Macro Roundup® AI

  1. Mitsubishi Heavy Industries developed an interceptor drone prototype capable of destroying enemy unmanned aerial vehicles in three months, drawing on its expertise in satellites, command and control systems, and submarines.
  2. Mitsubishi Heavy Industries chief executive Eisaku Ito argues that automobile factories are ill-suited to military drone production because drone specifications change constantly with the situation, while car plants are designed to make tens of thousands or millions of identical units.
  3. Eisaku Ito says Japan's defence ministry would want some drones developed and made without international partners because of data security concerns, giving Mitsubishi Heavy Industries an advantage as, in his words, the only Japanese company able to handle sea, land and air military kit comprehensively.

Related Articles:

  • Can Drones Be Stockpiled? Europe Wrestles With Weapons Dilemma — European defense officials argue that small, cheap drones have proven as effective as heavy armour in Ukraine, but stockpiling millions of them risks holding weapons made obsolete within months by new software, radio frequencies, and autonomous navigation. Drones that dominate one week can be jammed or outclassed the next.
  • Pentagon Approaches Automakers, Manufacturers to Boost Weapons Production — The Pentagon has approached U.S. automakers and other manufacturers about using their workers and factory capacity to boost production of munitions and other equipment as wars deplete stocks, asking whether they could rapidly shift to defense work. Most large non-defense manufacturers already hold Pentagon contracts, but these are typically limited in scope and value.
  • 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.

AI Summary. Chinese policymakers are discussing reducing incentives for researchers to publish in foreign journals, including cutting the weight given to leading international journals in promotion and tenure decisions. China-based authors accounted for almost a third of papers in a database of leading international scientific journals, up from 5% two decades earlier.

Sun Yu, Michael Peel and Eleanor Olcott Financial Times
Date Posted:

China is seeking to restrict the publication of domestic scientific research abroad. The government may push Chinese universities and research institutions to “reduce or remove the weight given to publishing in leading international journals.”

Is China moving to discourage researchers from publishing in foreign journals?

Core argument: Papers by China-based authors made up almost a third of the global total in the SCI database of leading international scientific journals in 2024, up from 5% two decades earlier.

Chinese policymakers are discussing ways to reduce the incentives for scientific researchers to submit their findings to foreign journals. The government could push Chinese universities and research institutions to reduce or remove the weight given to publishing in leading international journals in deciding academic promotion and tenure, the people said. Papers by China-based authors accounted for almost a third of the global total in the SCI — a database of leading international scientific journals — in 2024, up from 5% two decades earlier.

Takeaways by Macro Roundup® AI

  1. Papers by China-based authors made up almost a third of the global total in the SCI database of leading international scientific journals in 2024, up from 5% two decades earlier.
  2. Chinese policymakers are discussing ways to reduce incentives for researchers to submit findings to foreign journals.
  3. One option under discussion is pushing Chinese universities and research institutions to reduce or remove the weight given to publication in leading international journals in academic promotion and tenure decisions.

Related Articles:

  • The Growing Self-Reliance of Chinese Innovation — Linking patents to scientific papers through shared phrases, the authors find China's innovation has grown markedly more self-reliant across nearly all technology areas the U.S. treats as strategically important. In an aggregate grouping of these areas, the share of patent phrases traced to Chinese-produced articles rose from 2% to 24%, while the U.S.-produced share fell from 31% to 18%.
  • China and the Future Of Science — China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.
  • 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.