Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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
  • “…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


Thursday, July 30, 2026

AI Summary. The 30-year US Treasury yield rose more than 10 basis points to a 19-year high after the Federal Reserve left rates unchanged, while two-year yields fell to 4.23%, 10-year yields rose to 4.66%, and the dollar dropped. Interest-rate swaps priced roughly 60% odds of a rate increase in September.

Michael MacKenzie and Greg Ritchie Bloomberg
Date Posted:

Following the Fed’s 9–3 vote not to raise the funds rate, the 30-year yield climbed more than 14bps to as high as 5.23%, its highest level since 2007, likely reflecting the market’s concern that the Fed’s reluctance to hike puts it behind the curve.

Do long-term Treasury yields rise when the Fed holds rates steady?

Core argument: The US 30-year Treasury yield rose more than 10 basis points to its highest level in 19 years after the Federal Reserve left rates unchanged, while the dollar dropped.

The 30-year yield climbed more than 10 basis points to the highest level in 19 years. Yields on two-year notes — which are most sensitive to changes in the Fed’s policy — declined by six basis points to 4.23%, while 10-year yields were up five basis points to 4.66%. The dollar dropped. Interest-rate swaps reflected a roughly 60% probability that officials led by Chairman Kevin Warsh will boost borrowing costs in September after the decision [down from the previous meeting], even as some officials signaled growing conviction that a hike would be needed to control resurgent inflation. A hike is fully priced in for December.

Takeaways by Macro Roundup® AI

  1. The US 30-year Treasury yield rose more than 10 basis points to its highest level in 19 years after the Federal Reserve left rates unchanged, while the dollar dropped.
  2. Two-year yields, the most sensitive to Fed policy, fell six basis points to 4.23%, while 10-year yields rose five basis points to 4.66%.
  3. Interest-rate swaps reflected a roughly 60% probability of a September hike by officials led by Chairman Kevin Warsh, down from the previous meeting, with a hike fully priced in for December.

Related Articles:

  • The Dangerous Brew That’s Rattling Bond Markets — U.S. inflation has remained above the Federal Reserve's 2% target since 2022 while government borrowing runs high and companies borrow heavily to fund AI build-out. Even so, the 30-year Treasury yield reached a 19-year high of 5.18% while the 10-year yield, at 4.67%, sat below its October 2023 level.
  • Are Government Bonds Safe in Times of War and Pandemic? — Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
  • 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. Using observed AI usage data across 321 U.S. occupations, the authors estimate that highly exposed occupations saw a 6.7% decline in real wage growth with no detectable employment effects. The estimated declines are concentrated among the lowest earners, with service workers down 24.3% and the bottom wage quartile down 10.7%, while top earners show no significant effect.

Sania Edlich and Torsten Sløk Apollo
Date Posted:
Is Database:
Database

A difference-in-differences design finds 6.7% slower real-wage growth in AI-exposed occupations since 2023 than in low-exposure ones, with no detectable job loss. The largest effects were for the lowest quartile (-10.7%) and service occupations (-24.3%).

How does AI exposure affect wages across occupational earnings levels?

Core argument: Using observed AI usage data from the Anthropic Economic Index across 321 matched occupations from 2015–2025, the authors estimate that high-exposure occupations saw a 6.7% decline in real wage growth after 2023, with no detectable employment effects.

We examine the wage and employment effects of AI adoption across U.S. occupations using observed usage data from the Anthropic Economic Index rather than the theoretical exposure measures that dominate prior work. Using a difference-in-differences design with occupation and year fixed effects across 321 matched occupations from 2015 to 2025, we find that high-exposure occupations experience a 6.7% decline in real wage growth post-2023 with no detectable employment effects. The effect is concentrated among the lowest earners: service workers face a 24.3% decline and the bottom wage quartile a 10.7% decline, while top earners show no significant effect.Today, 5.8 million workers are affected, but as AI adoption deepens across corporate America, this figure is likely to grow substantially, with significant implications for income inequality and labor market policy in the years ahead. Only 321 of roughly 800 BLS occupations were matched, and the post-2023 period may be partially confounded by post-pandemic labor market dynamics. [Editor’s note: Figure 3 shows both wage and employment growth and decline among high-exposure workers, but the exposure measure combines automated and augmentative use, and thus cannot distinguish substitution from complementarity.]

Takeaways by Macro Roundup® AI

  1. Using observed AI usage data from the Anthropic Economic Index across 321 matched occupations from 2015–2025, the authors estimate that high-exposure occupations saw a 6.7% decline in real wage growth after 2023, with no detectable employment effects.
  2. The estimated wage effects are concentrated among the lowest earners, with service workers facing a 24.3% decline and the bottom wage quartile a 10.7% decline, while top earners show no significant effect.
  3. The authors estimate that 5.8 million workers are affected and expect that figure to grow as AI adoption deepens, while noting that only 321 of roughly 800 BLS occupations were matched and post-2023 results may be partly confounded by post-pandemic labor dynamics.

Related Articles:

  • AI and the Fable of the ATMs — Bank tellers per branch fell steadily as automated teller machines spread, and total teller employment held up only because banking deregulation drove a rise in branch numbers; teller jobs are down nearly 40% from their peak. The author argues invoking this case for AI requires identifying an equivalent offsetting source of labor demand.
  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.
  • Technology and the Baby Bust Paradox — Aging populations create structural incentives to automate, and the argument is that demographic change could become one of the strongest long-run drivers of artificial intelligence deployment. Technology-producing economies may benefit twice, offsetting their own labor shortages while exporting automation, robotics, and AI to other aging societies.

AI Summary. Hundreds of major data centers under construction worldwide are set to deliver computing power for artificial intelligence on a scale with no equal in the technology industry's history. The research firm Epoch AI estimates about 20m AI chips are in use today, a figure expected to double roughly every nine months.

Adam Satariano, Paul Mozur, Jacqueline Gu and Cade Metz New York Times
Date Posted:

An Epoch AI analysis forecasts that the number of working H100-equivalent chips will grow from ~20mm today to ~200mm by the end of 2028 as datacenters come online.

How fast is AI computing power set to grow?

Core argument: About 20 million A.I. chips currently sit in data centers worldwide, a figure expected to double roughly every nine months to about 200 million by the end of 2028, 10 times current levels, according to the research firm Epoch AI.

From the American Midwest to the Persian Gulf, hundreds of major data centers now under construction will be turned on in the coming years. They are set to deliver an avalanche of computing power to develop and run A.I. that has no equal in the history of the technology industry, with breakthroughs that once felt revolutionary likely to become increasingly routine. Behind each leap in A.I. are corresponding jumps in computing power. Today, there are about 20 million A.I. chips crammed into the data centers that underpin the technology’s growing abilities and usage worldwide, according to the research firm Epoch AI. That figure is expected to double roughly every nine months, putting the world on pace to have about 200 million of the chips by the end of 2028 — 10 times current levels.

Takeaways by Macro Roundup® AI

  1. About 20 million A.I. chips currently sit in data centers worldwide, a figure expected to double roughly every nine months to about 200 million by the end of 2028, 10 times current levels, according to the research firm Epoch AI.
  2. Hundreds of major data centers under construction from the American Midwest to the Persian Gulf will be turned on in the coming years, delivering computing power for A.I. with no equal in the history of the technology industry.
  3. Each leap in A.I. is backed by a corresponding jump in computing power, with breakthroughs that once felt revolutionary likely to become increasingly routine.

Related Articles:

  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.
  • Chart of the Day: Small Models are Closing the Gap to Frontier AI — Achieving 60% on MMLU, a test of academic reasoning, once required a 540bn-parameter model but was reached by a 3.8bn-parameter model two years later, a 142x reduction in parameters. Models small enough to run on phones or sensors shift inference from data centers to devices, weakening the case for paying cloud providers per token.
  • Semiquincententacles — Leading artificial-intelligence labs are moving to usage-based token pricing on a cost-plus basis that includes total ownership costs, pushing token prices higher and giving some enterprises reason to migrate to cheaper open models. Frontier models remain necessary for cybersecurity, distillation training, agents, and scientific discovery, where maximum performance is required.

AI Summary. An analysis of residential air-conditioning in OECD countries finds that per capita income explains little of the variation, while being European is associated with roughly 50 percentage points lower air-conditioning availability. At US income levels, a country following European patterns would have air-conditioning in fewer than half its homes.

Nicholas Eberstadt American Enterprise Institute
Date Posted:

French and German AC availability is at 1965 and 1963 American levels, respectively. Eberstadt argues the “striking lack of AC nowadays in affluent modern Europe looks very much like some sort of stubborn choice.”

Does income or being European explain home air-conditioning differences?

Core argument: In a chart predicting OECD residential air-conditioning availability from per capita income and European status, being European is associated with a drop of almost 50 percentage points, all else equal.

The chart “predicts” residential AC penetration in OECD today using just two factors: per capita income, and whether or not a country is European. Per capita income turns out to make little difference (no surprise: our analysis leaves out all of the poor world.) But the Europe thing matters, big time. All else equal, an OECD country’s residential AC availability drops by almost 50 percentage points if it happens to be European. Put another way: by the patterns in the chart, a country with America’s present income level would have air-conditioning in fewer than half its homes today if it were on a “European” schedule. With “European” norms, indeed, a country as rich as the US today would have the same limited AC coverage the US reported over half a century ago.

Takeaways by Macro Roundup® AI

  1. In a chart predicting OECD residential air-conditioning availability from per capita income and European status, being European is associated with a drop of almost 50 percentage points, all else equal.
  2. Per capita income makes little difference to residential air-conditioning penetration in the chart, which covers only OECD countries and leaves out the poor world.
  3. By the chart's patterns, a country with America's present income level on a "European" schedule would have air conditioning in fewer than half its homes, matching the limited coverage the United States reported over half a century ago.

Related Articles:

  • Britain and Europe Need to Get Serious About Air Conditioning — European cities face more intense, frequent, and longer heat, with hot nights rising fastest, yet air conditioning remains far less common than in the US: London is seeing as many days requiring cooling as Portland, Oregon, where 79% of households have air conditioning. Extreme heat killed an average 83,000 western Europeans annually versus 20,000 North Americans.
  • 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.
  • The Future of Cooling — Over half of the world's 1.6bn air conditioners are in just two countries, China with 570m units and the United States with 375m, and nearly 70% of all units globally are in residential buildings. Household ownership ranges from about 4% in India and under 10% in Europe to over 90% in the United States and Japan.

AI Summary. The Pentagon has committed over $120bn across weapons deals, including a Patriot missile contract valued at nearly $59bn and a $76.6bn agreement for nine Virginia-class and five Columbia-class nuclear submarines. The military is shifting from annual purchases to multiyear agreements to encourage contractors to invest in new factories and supply chains.

Drew FitzGerald and Marcus Weisgerber Wall Street Journal
Date Posted:

The Pentagon earmarked ~$136B for Patriot missile production as well as 14 new submarines over 7 years. Congress must still provide annual funding for the deals.

Is the Pentagon shifting to multiyear weapons contracts to expand production capacity?

Core argument: General Dynamics Electric Boat and HII Newport News Shipbuilding received a $76.6 billion deal for nine Virginia-class and five Columbia-class nuclear submarines to be delivered by 2038.

A Patriot contract with missile maker Lockheed Martin is now valued at nearly $59 billion, a significant expansion of an order announced in April. General Dynamics Electric Boat and HII Newport News Shipbuilding received a $76.6 billion deal for nine Virginia-class and five Columbia-class nuclear submarines that will be delivered by 2038. Lockheed has another megadeal for missiles on order with the U.S. government—a preliminary $35 billion multiyear contract for Thaad interceptors, a larger munition also capable of thwarting ballistic missiles. Both contracts, which span seven years, reflect the Pentagon’s changing approach to buying missiles. The military has proposed a series of multiyear agreements instead of annual purchases to guarantee a smoother supply of weaponry over time. The effort is designed to motivate contractors to invest in new factories and supply-chain agreements in exchange for a reliable signal of future orders. Congress must still provide annual funding for the deals.

Takeaways by Macro Roundup® AI

  1. General Dynamics Electric Boat and HII Newport News Shipbuilding received a $76.6 billion deal for nine Virginia-class and five Columbia-class nuclear submarines to be delivered by 2038.
  2. Lockheed Martin's Patriot missile contract is now valued at nearly $59 billion, an expansion of an order announced in April, alongside a preliminary $35 billion multiyear contract for Thaad interceptors.
  3. The U.S. military has proposed seven-year multiyear missile agreements in place of annual purchases to motivate contractors to invest in new factories and supply-chain agreements, though Congress must still provide annual funding.

Related Articles:

  • Renewed Iran War Would Test Diminished Interceptor Inventories — Air defense against Iranian missile attacks has achieved high but imperfect interception rates, and the interceptors expended have left Patriot inventories under 1,000 and THAAD inventories at about 250. Diminished stockpiles may force more risk-taking on interceptions and pose a near- to medium-term risk to U.S. readiness for a war with China in the western Pacific.
  • Is the Industrial Base on a Wartime Footing? A Progress Report — About 10,000 new firms have entered the US defense market in two years, and nontraditional companies received over $120bn in contract obligations in fiscal 2025, while munitions contract obligations have risen 330% since fiscal 2010. The Defense Department is signing large-scale multiyear munitions agreements and backing a rare earth supply chain outside Chinese control.
  • Lockheed Seeks European Production for Cheaper Patriot Missile — Lockheed Martin plans to field a lower-cost Patriot missile, the PAC-3 Adapted Capability Effector, priced at less than half the roughly $4mn per-missile cost of its current PAC-3 MSE interceptors, developed and manufactured with US and European industry partners. The company cites soaring military demand for more cost-effective ways to counter drones.

Friday, July 31, 2026

AI Summary. The dollar fell on concerns the Federal Reserve won't act forcefully enough to contain inflation, declining even as US yields rose — a pattern analysts attribute to doubts about the central bank's credibility. Long-dated Treasury yields reached their highest since 2007, and Japanese intervention to support the yen added pressure on the dollar.

Alice Atkins Bloomberg
Date Posted:

Bloomberg’s Dollar Spot Index fell 1.2% over five days. Although long-term US yields rose, “FOMC messaging” prompted the market to mark down the expected policy rate a year ahead, suggesting that the rise in yields reflected increased inflation concerns.

Is the dollar falling on doubts about the Fed's inflation resolve?

Core argument: The dollar headed for its worst week in three months, with Bloomberg's Dollar Spot Index near its weakest level in over a month, on concerns the Federal Reserve won't move forcefully enough to contain inflation.

The dollar headed for its worst week in three months on concerns the Federal Reserve won’t move forcefully enough to contain inflation. Bloomberg’s Dollar Spot Index remains near the weakest level in over a month. The greenback’s retreat despite higher US yields — which would typically support the currency — reflects angst over the Fed’s credibility. Chair Kevin Warsh is facing scrutiny after his messaging stoked worries that the central bank may hold off raising rates and allow inflation to remain above target. Long-dated Treasury yields are at their highest since 2007. The simultaneous drop in Treasuries and the dollar “feels very ‘emerging market’,” said Randhir Prakash, managing director at Gavekal Wealth. Investors are starting to signal displeasure at the path of US policy, he said, which is “bearish for both Treasuries and the US dollar.” Efforts by Japanese authorities to shore up the yen also added to pressure on the greenback. Intervention saw the Japanese currency surge as much as 3.3% versus the dollar in New York trading on Thursday, though it has since pared the advance after the Bank of Japan left interest rates unchanged on Friday.

Takeaways by Macro Roundup® AI

  1. The dollar headed for its worst week in three months, with Bloomberg's Dollar Spot Index near its weakest level in over a month, on concerns the Federal Reserve won't move forcefully enough to contain inflation.
  2. The dollar retreated despite higher US yields, which would typically support the currency, with long-dated Treasury yields at their highest since 2007 and Chair Kevin Warsh facing scrutiny after messaging that stoked worries the Fed may hold off raising rates.
  3. The yen surged as much as 3.3% against the dollar in New York trading on Thursday after Japanese intervention, though it pared the advance after the Bank of Japan left interest rates unchanged on Friday.

Related Articles:

  • Peak Dollar Strength — Net positioning across major currencies shows markets are broadly long the US dollar. The author argues this bullishness is misplaced because the Federal Reserve is less hawkish than markets assume and falling oil prices should pull inflation down, leaving the dollar at peak strength.
  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
  • The Dollar’s Hidden Dependence on the AI Trade — Net foreign inflows into US equities have reached a record high, driven in large part by overseas investors seeking artificial intelligence exposure unavailable in their home markets. Because most foreign equity investors leave currency risk unhedged, a pullback in these inflows if AI disappoints poses a significant downside risk to the US dollar.

AI Summary. The Big Mac index, which compares burger prices across countries converted into dollars, shows currency misalignments in either direction at their widest since the mid-1990s, with American inflation, an undervalued Chinese yuan, and a falling yen cited as contributors. Big Mac prices also reflect domestic supply and demand for nontradeable goods.

Economist Staff The Economist
Date Posted:

American inflation since 2021, the “growing prominence of an undervalued Chinese yuan” and the “plunging yen” have left the Economist’s Big Mac Index measure of departures from PPP at its highest since the mid-1990s.

How wide are currency misalignments according to burger prices?

Core argument: A Big Mac costs about 20% less in Japan than in China, with the plunging yen and an undervalued Chinese yuan among the contributors to currency misalignment.

Why does a Big Mac cost so much more in some countries than in others? [Many of the key factors are less about internal finance than about domestic supply and demand conditions that affect the price of nontradeables or “home goods.”] But nominal exchange rates are also a big part of the story. Currencies are once again moving out of whack. According to the Big Mac index, the world price of burgers (converted into dollars, then averaged across countries, weighted by their GDP) moved closer to the American price in the first decade of this century. But since 2010 it has once again diverged. Recent editions of the index show that currency misalignments in either direction are at their widest since the mid-1990s. American inflation after 2021 is one culprit. The growing prominence of an undervalued Chinese yuan is another. A third contributor is the plunging yen. Incredibly, it is now about 20% cheaper to buy a Big Mac in Japan than in China.

Takeaways by Macro Roundup® AI

  1. A Big Mac costs about 20% less in Japan than in China, with the plunging yen and an undervalued Chinese yuan among the contributors to currency misalignment.
  2. Recent editions of the Big Mac index show currency misalignments in either direction at their widest since the mid-1990s, with American inflation after 2021 cited as one culprit.

Related Articles:

  • Currency Moves Can Drive Rebalancing — Trade responds to exchange-rate changes with a lag of roughly 8 to 12 quarters, and after the dollar fell from its mid-1980s peak the US trade deficit dropped from about 3% to about 1% of GDP while Japan's surplus fell from 4% to 2%. The author argues currency appreciation, not fiscal consolidation, drove that rebalancing.
  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
  • Peak Dollar Strength — Net positioning across major currencies shows markets are broadly long the US dollar. The author argues this bullishness is misplaced because the Federal Reserve is less hawkish than markets assume and falling oil prices should pull inflation down, leaving the dollar at peak strength.

AI Summary. Google, Amazon, Microsoft and Meta have together spent $1.1tn on capital investment since the start of the artificial intelligence boom in 2023, according to the companies' earnings reports. Executives at several of the firms told analysts the spending would continue to reduce free cash flow in coming quarters.

Ryan McMorrow, Rafe Rosner-Uddin and Hannah Murphy Financial Times
Date Posted:
Is Database:
Database

Google, Amazon, Microsoft and Meta’s combined free cash flow fell to a decadal low of ~$7B as their capex continues to rise.

How much have big tech firms spent on AI investment?

Core argument: Combined capital spending by Google, Amazon, Microsoft and Meta from the start of the AI boom in 2023 through the end of June reached $1.1tn, according to the four companies' earnings reports.

Combined capital spending by Google, Amazon, Microsoft and Meta from the beginning of the AI boom in 2023 to the end of June hit $1.1tn, according to earnings reports from the four companies in the past two weeks. Several top executives acknowledged to analysts that the outlay on AI would continue to sap free cash flow in coming quarters. The free cash flow metric is closely watched as a measure of the cash companies have left to service debt or return to shareholders after covering their operating costs and capital spending.

Takeaways by Macro Roundup® AI

  1. Combined capital spending by Google, Amazon, Microsoft and Meta from the start of the AI boom in 2023 through the end of June reached $1.1tn, according to the four companies' earnings reports.
  2. Several top executives at Google, Amazon, Microsoft and Meta told analysts that AI outlays would continue to sap free cash flow in coming quarters.
  3. Free cash flow is closely watched as a measure of the cash companies have left to service debt or return to shareholders after covering operating costs and capital spending.

Related Articles:

  • The Summer I Turned Pretty — A warning sign in a boom cycle is when companies closest to final demand weaken while capital spending beneficiaries keep thriving, as when telecom operators' shares rolled over while communications equipment stocks kept rising. Semiconductor stock prices and free cash flow are soaring while large cloud providers' shares stagnate and their free cash flow plummets.
  • The Market Is Asking Questions — Markets are weighing whether the trillions committed upfront to AI data centers, chips, and power will generate returns above the cost of capital before those assets depreciate. With the buildout increasingly funded by debt rather than internal cash flow and borrowing spreads widening, financing costs could rise until new data-center spending no longer clears its return hurdle.
  • The Magnificent Seven Are Riding Into the Sunset — Companies have steadily "de-equitized" through buybacks and cash-funded mergers, supporting share prices, but Barclays projects equity supply could rise for the first time in decades as large cloud computing firms fund capital spending. Their high valuation multiples make equity cheaper than debt, and that re-equitization would weigh on share prices.

AI Summary. Japan's annual births have fallen to roughly a quarter of their 1947 peak — about 686,000 versus over 2.7m — and are also below the level recorded in 1873, when Japan first began collecting such numbers. Fertility levels around the world are still falling.

Nicholas Eberstadt American Enterprise Institute
Date Posted:

China’s total births in 2025 were about on par with those of the Qing Dynasty in the 1750s. Japan’s 2025 births were on par with those of the Tokugawa shogunate in the late 1600’s.

Have annual births fallen below levels recorded over 150 years ago?

Core argument: Japan recorded 686,000 births in 2024, barely a quarter of its 1947 peak of over 2.7 million.

The admirable Human Mortality Database, pioneered by researchers at Berkeley and Rostock, Germany, offers careful reconstructions of such historical birth numbers for dozens of developed countries. We can use their figures for our comparisons. Start with Japan. By 2024, the Japanese birth level was barely a quarter of its peak in 1947, 77 years earlier (686,000 vs. over 2.7 million). But Japan’s 2024 level was also significantly lower than the corresponding total for 1873—over 150 years earlier, at the dawn of the Meiji era, when Japan first started gathering such numbers. And remember—fertility levels around the world are still falling.

Takeaways by Macro Roundup® AI

  1. Japan recorded 686,000 births in 2024, barely a quarter of its 1947 peak of over 2.7 million.
  2. Japan's 2024 birth total was also lower than its 1873 figure, at the dawn of the Meiji era when Japan first began gathering such numbers over 150 years earlier.
  3. The Human Mortality Database, pioneered by researchers at Berkeley and Rostock, Germany, provides reconstructions of historical birth numbers for dozens of developed countries, and fertility levels worldwide continue to fall.

Related Articles:

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • The Demographic Future of Humanity: Facts and Consequences — The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
  • Baby Busts and Growth Booms: Demographic Change and the Macroeconomy — A 1pp lower birth rate 20 years earlier is associated with 22 log points higher output per worker 20 years later and 29 log points higher after 40 years, about 0.73pp faster annual growth. The authors find lower birth rates are also associated with more labor-saving patents, larger high-tech shares, and higher productivity growth.