Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…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 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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, September 23, 2026

AI Summary. Racial disparities in US crime, arrest, and prison admission rates have declined across offence types, driven by reductions among Black Americans. Black-White disparity in drug-offence prison admissions fell from 12x to 2.9x, attributable to a 75% drop in the Black drug admission rate, while declines for violent and property offences were smaller.

Jason Robey and Michael Light Nature Human Behaviour
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From their respective recent peaks in 2000 and 2006 to 2019, prison admissions for violent crime fell 20% for Whites and 43% for Blacks. Race-specific NIBRS estimates suggest actual violent crime fell 18% and 47%, respectively.

Why are racial gaps in US arrests and imprisonment narrowing?

Core argument: Black–White disparity in drug-offence prison admission rates fell from 12 to 1 in 2000 to 2.9 to 1 in 2019, attributed almost entirely to a 75% drop in the Black prison admission rate for drug offences.

From their respective peaks [2000 for whites, 2006 for blacks], prison admission rates for violent crime fell 20% for Whites and 43% for Blacks. [Because UCR crime totals do not identify offender race, the authors use the National Incident-Based Reporting System (NIBRS), which records offender race as reported by victims, witnesses or police, to allocate national violent-crime totals by race. NIBRS contains about three times as many violent offenders as arrestees. As a check on crimes not reported to police, they use National Crime Victimization Survey victim reports; results are similar.] [Recorded violent crime fell 18% for Whites and 47% for Blacks See Table 2]. For Whites, the decline in prison admissions is primarily a function of a decline in crime and arrests, with case processing dampening the decline. For Blacks, the decline in violent prison admissions is exclusively attributed to a 47% reduction in violent crime, as policing and case processing trends worked against an otherwise larger decline. [Arrests per crime and prison admissions per arrest both rose slightly; See Table 2].

Takeaways by Macro Roundup® AI

  1. Black–White disparity in drug-offence prison admission rates fell from 12 to 1 in 2000 to 2.9 to 1 in 2019, attributed almost entirely to a 75% drop in the Black prison admission rate for drug offences.
  2. Racial disparities in crime, arrest, and prison admission rates have declined across all offence types since about 2000, largely attributable to reductions in crime, arrests, and imprisonment among Blacks.
  3. Declining drug admissions accounted for 53% of the overall drop in Black prison admission rates, while for Whites 62% of the decline came from property offences, with violent (20%) and drug (19%) admissions contributing roughly equally.

Related Articles:

  • America’s Incarceration Rate Is About To Fall Off A Cliff — The U.S. imprisonment rate stayed below 120 per 100,000 people from the end of World War II until the mid-1970s, then doubled by 1985 and grew about 8% a year, passing 1m prisoners in 1994 and peaking in 2009 — 18 years after violent crime peaked.
  • Number of Young People Accused of Serious Crimes Surges in New York City — New York City Police Department figures show 4,858 major crimes with a minor accused or arrested in the most recent year, up 37% from 3,543 seven years earlier, with robberies and felony assaults continuing to rise. Police officials attribute the increase to a state law diverting most 16- and 17-year-old defendants from adult courts.
  • How Many Are Criminals — In the United States, between one in four and one in three Black men eventually serve prison time, compared with one in seven Hispanic men and roughly one in fifteen non-Hispanic white men. In Denmark, about 9% of men of Danish origin and 27% of men of non-Western origin have a criminal conviction by age 24.

AI Summary. China's export boom shows signs of cresting, with year-over-year growth leveling off at roughly 24-27% in US dollar terms, and memory chips now the biggest single swing factor for exports. Total export growth is expected to converge toward the recent trend for non-artificial-intelligence products of about 5-7%.

Andrew Batson Gavekal
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Andrew Batson argues that as the memory-chip price cycle’s impact on Chinese export growth fades, export growth in renminbi terms in 2027 “will most likely converge toward the recent trend for products outside the AI complex, which is around 5–7%.”

Is China's export boom leveling off toward slower growth?

Core argument: China’s export growth has leveled off over the past three months at roughly 24–27% year-on-year in US dollar terms and 18–20% in renminbi terms, a sign the export wave is cresting.

China’s latest extraordinary export wave is showing signs of cresting. The headline YoY growth of exports has leveled off over the past three months, staying around 24-27% in US dollar terms and 18-20% in renminbi terms. The boom in exports of products associated with investment in artificial intelligence is certainly not over, but current super-high growth rates will probably slow in coming months. Memory chips are now the biggest single swing factor for exports, and prices for some products have recently leveled off after their massive surge. While the ebb and flow of memory prices is difficult to forecast, growth of total exports in 2027 will most likely converge toward the recent trend for products outside the AI complex, which is around 5-7%. Semiconductor cycles have limited implications for China’s vast range of other exports, which are still very competitive in global markets.

Takeaways by Macro Roundup® AI

  1. China’s export growth has leveled off over the past three months at roughly 24–27% year-on-year in US dollar terms and 18–20% in renminbi terms, a sign the export wave is cresting.
  2. Memory chips are the biggest single swing factor for China’s exports, with prices for some products leveling off after a massive surge and super-high AI-related growth rates likely to slow in coming months.
  3. Total Chinese export growth in 2027 will most likely converge toward the recent 5–7% trend for products outside the AI complex, which remain very competitive in global markets.

Related Articles:

  • China’s Share Of Global Container Exports Soars To 40% — China accounted for 40% of global container exports on a three-month rolling average, up 2.5 percentage points in nine months, according to the European Union Chamber of Commerce in China. The chamber's president argues this shows global trade imbalances are growing faster than expected.
  • Understanding Global Imbalances — The US, China, Germany, and Japan account for roughly two-thirds of global current account imbalances, with the US deficit at 4% of GDP financed by capital inflows into dollar assets. The average duration of a surplus or deficit spell roughly doubled since the 1980s, building large net foreign asset and liability positions.
  • The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism — About 30% of Chinese industrial companies are unprofitable "zombies" kept alive by subsidies far larger than those elsewhere, rather than exiting amid falling industrial producer prices. Countries with large increases in manufactured imports from China also saw slowdowns in domestic manufacturing, including declining manufacturing shares of output across most of Southeast Asia.

AI Summary. An analysis of authors at a leading AI research conference finds China is the largest originating source of elite AI talent, with its share of researchers holding Chinese undergraduate degrees rising 11 percentage points to 57%, while the US share fell to 13%. The US remains a net importer of AI researchers, gaining 2,145 while China lost 1,729.

Damien Ma and Binyi Yang Carnegie Endowment for International Peace
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Surveying education/employment histories of authors at the Neural Information Processing Systems conference, Ma and Yang infer China educated 57% of elite AI talent as of 2025, versus 13% for the US. Yet the US gained 2,145 researchers y/y while China lost 1,729.

Does China produce the most elite AI talent while America attracts it?

Core argument: Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.

[Using a methodology based on paper authors from the Neural Information Processing Systems conference (NeurIPS) Damien Ma and Binyi Yang find] China has established a commanding lead as the largest originating source of elite AI talent globally. Compared to 2022, the share of Chinese-origin AI talent, defined as those who received undergraduate degrees in China, increased 11 percentage points to 57% in 2025, while the U.S. share fell to 13%. The United States remains a magnet for global AI talent, particularly Chinese talent. Despite U.S.-China tensions, among AI researchers working in the United States, the 2025 share of those holding undergraduate degrees from China rose by 4 percentage points. When it comes to brain gain vs. brain drain, the United States saw a net gain of +2,145 researchers in 2025 while China registered a net loss of -1,729 researchers.

Takeaways by Macro Roundup® AI

  1. Damien Ma and Binyi Yang find China’s share of elite AI talent, defined by undergraduate degrees earned in China, rose 11 percentage points to 57% in 2025 versus 2022, while the U.S. share fell to 13%.
  2. Among AI researchers working in the United States, the share holding Chinese undergraduate degrees rose 4 percentage points in 2025, despite U.S.-China tensions.
  3. The United States recorded a net gain of 2,145 AI researchers in 2025, while China registered a net loss of 1,729, under Ma and Yang’s methodology based on NeurIPS paper authors.

Related Articles:

  • China Lures Home Its Top AI Talent From Silicon Valley — Elite artificial intelligence researchers have left US firms including Google DeepMind and OpenAI for Chinese companies such as ByteDance, Tencent, and Alibaba. Three China- and San Francisco-based headhunters say they relocated more than 30 US-based researchers to China over 12 months, up from low single digits the prior year.
  • 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.
  • Why Europe Produces Nobel Prize Winners but Not Elon Musks — Europe trains more engineering graduates per capita than China and more STEM PhDs than any region outside the United States, yet the only EU-born companies to reach $100bn market value in the past fifty years, Spotify and BioNTech, listed on US exchanges. Europe captures 6% of global AI startup funding versus 61% for the United States.

AI Summary. Anthropic and OpenAI have each released lower-cost versions of their leading AI models amid a price war with low-cost Chinese rivals. Anthropic says its new Claude Opus 5.5 is roughly 40% cheaper to use than its predecessor, while OpenAI says its new ChatGPT-6 Sol and Luna models are 50% cheaper than their predecessors.

George Hammond Financial Times
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Anthropic’s latest Claude model is ~40% cheaper to use than its precursor, and can perform “most” tasks on par with Fable. OpenAI has released lower-cost versions of ChatGPT-6 known as Sol and Luna, which are ~50% cheaper than their ChatGPT-5.6 predecessors.

Are leading US AI labs cutting model prices as Chinese rivals compete?

Core argument: Anthropic’s Claude Opus 5.5 is roughly 40% cheaper to use than its predecessor and is the first of a new family of models the company says will be more cost-efficient than previous generations.

Anthropic and OpenAI both released cheaper versions of their leading models, as the price war between the two leading US labs and their low-cost Chinese rivals intensifies. The latest Claude model from Anthropic, Opus 5.5, is roughly 40% cheaper to use than its precursor and was the first of a new “family” of models that will be more cost-efficient than previous generations, the company said. OpenAI, meanwhile, released lower-cost versions of ChatGPT-6, known as Sol and Luna, following the release of its most advanced ChatGPT-6 Astra model at the start of the month. It said the models will be 50% cheaper than their predecessors in the ChatGPT-5.6 slate.

Takeaways by Macro Roundup® AI

  1. Anthropic’s Claude Opus 5.5 is roughly 40% cheaper to use than its predecessor and is the first of a new family of models the company says will be more cost-efficient than previous generations.
  2. OpenAI released lower-cost versions of ChatGPT-6, Sol and Luna, which it says will be 50% cheaper than their predecessors in the ChatGPT-5.6 slate, following its most advanced ChatGPT-6 Astra model.
  3. The cheaper releases from Anthropic and OpenAI come as the price war between the two leading US labs and their low-cost Chinese rivals intensifies.

Related Articles:

  • The AI Price Wars and Their Consequences — Artificial intelligence models are converging in capability and price, making switching easier and margins harder to defend, with US labs cutting prices on lower- and mid-tier offerings while keeping frontier models expensive. An 80% annual price decline requires 400% unit growth just to hold revenue flat, straining firms financing enormous capital spending.
  • The AI Trade Is Losing One of Its Key Signals — An index blending artificial intelligence token prices and usage is ambiguous when it softens, since token prices have fallen more than 90% since 2023 while total spending has roughly doubled over the past year. Allianz Research measures a nearly 46% growth gap between artificial intelligence investment and sales, wider than the 32% divergence during the 2001 telecom bust.
  • Anthropic’s Best AI Model Struggles To Attract Users As Cheaper Tools Thrive — Spending on Anthropic's largest and priciest AI model has plateaued at about 11% of total outlay on the company's tools, according to payments data from 70,000 companies, breaking a pattern of corporate users defaulting to the most powerful models. Analysts and investors cite its high price and older models' adequacy.

AI Summary. US Treasury yields climbed to their highest levels in about two decades, with the five-year note yield rising above 5%, leaving only the two- and three-year maturities below that level. The 10-year rate rose almost 17 basis points to 5.13%, while the 30-year traded near 5.4%.

Greg Ritchie and Elizabeth Stanton Bloomberg
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The US 10-year Treasury yield jumped 17bps to 5.13%, its highest level since 2007. A 5-year Treasury auction drew weak demand, pushing the 5-year yield above 5% for the first time since 2007.

Are Treasury yields climbing to their highest levels in two decades?

Core argument: The US 10-year Treasury yield rose almost 17 basis points to 5.13%, its highest since 2007.

Auction results pushed the yield on five-year US notes above 5% for the first time since 2007, leaving the two- and three-year maturities the only coupon-bearing tenors below that milestone level. The benchmark 10-year rate rose almost 17 basis points to 5.13%, the highest since 2007. The 30-year yield traded at about 5.4%, the highest since 2007, and within about 4 basis points of the highest level since 2004.

Takeaways by Macro Roundup® AI

  1. The US 10-year Treasury yield rose almost 17 basis points to 5.13%, its highest since 2007.
  2. Auction results pushed the five-year US note yield above 5% for the first time since 2007, leaving only the two- and three-year maturities below that level among coupon-bearing tenors.
  3. The 30-year US yield traded at about 5.4%, the highest since 2007 and within roughly 4 basis points of its highest level since 2004.

Related Articles:

  • Don’t Draw The Wrong Conclusion From Treasury Yields — Ten-year real yields equal the average expected overnight rate over the next decade plus a term premium, and fiscal credibility or debt sustainability concerns would show up as a higher term premium. With the term premium and inflation expectations contained, the increase in bond yields reflects higher expected long-term overnight rates.
  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
  • America’s Risky Debt: What Markets See That Policymakers Don’t — Two market-based measures suggest the safety premium investors pay to hold US Treasuries has compressed toward zero and at times reversed: the spread between top-rated corporate bonds and Treasuries after stripping out default risk, and the gap between currency-hedged foreign G10 government yields and Treasury yields at the same maturity, where longer-maturity comparisons now favor foreign bonds.

AI Summary. The US Gulf Coast diesel crack spread cleared $100 per barrel for the first time on record, against a normal range of $15 to $30. Because diesel is an intermediate input embedded in the delivered cost of nearly every physical good, the author argues the increase migrates with a lag into core goods and services inflation.

Torsten Sløk Apollo
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Slok notes that, unlike gasoline, “diesel is an intermediate input embedded in the delivered cost of nearly every physical good.” Diesel crack spreads thus pass through into core inflation, which “the Fed cannot ignore.”

Does a record diesel refining margin feed into core inflation?

Core argument: The US Gulf Coast diesel crack spread cleared $100/bbl in August for the first time on record, against a normal range of $15–$30.

The US Gulf Coast diesel crack spread cleared $100/bbl for the first time on record in August against a normal range of $15 to $30. Unlike a gasoline spike, which lands on consumers as a one-time tax on discretionary spending, diesel is an intermediate input embedded in the delivered cost of nearly every physical good, from freight and rail to agriculture and construction. That means the rise in diesel prices does not stay in the energy line of the CPI but migrates with a lag into core goods and services, which is exactly the kind of pass-through the Fed cannot dismiss as transitory. The bottom line is that diesel margins are now setting the long end of the curve because diesel crack spreads are an important driver of future core inflation.

Takeaways by Macro Roundup® AI

  1. The US Gulf Coast diesel crack spread cleared $100/bbl in August for the first time on record, against a normal range of $15–$30.
  2. Diesel is an intermediate input embedded in the delivered cost of nearly every physical good, spanning freight, rail, agriculture, and construction, unlike a gasoline spike that lands on consumers as a one-time tax on discretionary spending.
  3. Rising diesel prices migrate with a lag out of the CPI energy line into core goods and services, a pass-through the Fed cannot dismiss as transitory, making diesel crack spreads an important driver of future core inflation.

Related Articles:

Thursday, September 24, 2026

AI Summary. The rise in US bond yields, which has pushed 30-year fixed mortgage rates back above 7%, reflects higher real yields rather than higher inflation expectations, with market-based inflation breakevens barely changed over the past five years. The negative real yields that made financing exceptionally easy have reversed.

John Authers Bloomberg
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Authers presents real evidence that the increase in bond yields is not an alarming indication of elevated expected inflation. “Breakevens barely budged over the last five years,” he notes.

Are rising bond yields driven by real yields rather than inflation expectations?

Core argument: US 30-year fixed mortgage rates are back above 7% as bond yields return to 2007 levels, a rise the evidence attributes more to a “good” pickup in growth than to other widely cited causes.

The rise in bond yields looks alarming and has had a horrible effect on US mortgages, with 30-year fixed rates back above 7%. But the evidence is that the overall rise in yields is more a response to a “good” rise in growth, rather than to other widely cited potential causes. Consumers’ inflation concerns have risen since the Iran war drove up oil prices nearly seven months ago, but longer-term market-based inflation expectations have barely budged. Yields can be broken into real and inflation-driven components using the gap between fixed income and inflation-protected bonds (TIPS). Inflation breakevens barely budged over the last five years; real yields are now higher and account for all of the rise of the last five years. To illustrate that differently, negative real yields drove the exceptionally easy financing conditions of 2021. That’s now totally reversed.

Takeaways by Macro Roundup® AI

  1. US 30-year fixed mortgage rates are back above 7% as bond yields return to 2007 levels, a rise the evidence attributes more to a “good” pickup in growth than to other widely cited causes.
  2. Inflation breakevens, the gap between fixed income and inflation-protected bond yields, have barely budged over the last five years, so higher real yields account for all of the rise in bond yields over that period.
  3. Consumers’ inflation concerns have risen since the Iran war drove up oil prices nearly seven months ago, while longer-term market-based inflation expectations have barely moved.

Related Articles:

  • Don’t Draw The Wrong Conclusion From Treasury Yields — Ten-year real yields equal the average expected overnight rate over the next decade plus a term premium, and fiscal credibility or debt sustainability concerns would show up as a higher term premium. With the term premium and inflation expectations contained, the increase in bond yields reflects higher expected long-term overnight rates.
  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
  • America’s Risky Debt: What Markets See That Policymakers Don’t — Two market-based measures suggest the safety premium investors pay to hold US Treasuries has compressed toward zero and at times reversed: the spread between top-rated corporate bonds and Treasuries after stripping out default risk, and the gap between currency-hedged foreign G10 government yields and Treasury yields at the same maturity, where longer-maturity comparisons now favor foreign bonds.

AI Summary. Yields on the longest-dated US government bonds reached their highest level in more than two decades, while the average yield on government debt worldwide stands just below 4%, the highest since 2007. A gauge of US bond market volatility also climbed, making investors more hesitant to buy despite the more attractive yields.

Alice Atkins, Ruth Carson and Elizabeth Stanton Bloomberg
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The US 30-year Treasury yield jumped as much as 7bp to 5.47%, its highest level since 2004. The US 10-year Treasury yield rose to 5.18%.

Are rising bond yields failing to attract hesitant investors?

Core argument: The US 30-year Treasury yield rose to its highest level since 2004 as the selloff in the longest-dated government bonds deepened.

Yields on the US’s longest-dated bonds climbed to the highest level in more than two decades. The average yield on government debt worldwide now stands within a whisker of 4%, the highest since 2007, Bloomberg’s Global Aggregate Treasuries index shows. Rising volatility is adding to the gloom, making investors more hesitant to step in even as higher yields make bonds more attractive. The ICE BofA MOVE Index, which measures US bond market swings, climbed Wednesday to the highest level since March. “Most fixed income will like higher yields, but want them to be stable there,” said Hans Mikkelsen, strategist at TD Securities. Investors are “afraid of catching a falling knife,” he said.

Takeaways by Macro Roundup® AI

  1. The US 30-year Treasury yield rose to its highest level since 2004 as the selloff in the longest-dated government bonds deepened.
  2. The average yield on government debt worldwide stands just below 4%, the highest since 2007, according to Bloomberg’s Global Aggregate Treasuries index.
  3. The ICE BofA MOVE Index of US bond market swings climbed to its highest level since March, with TD Securities strategist Hans Mikkelsen saying investors are “afraid of catching a falling knife.”.

Related Articles:

  • Interest Rates and Stock Prices: An Old Debate Resurfaces! — An estimate of the intrinsic 10-year US Treasury rate, built from actual inflation and real economic growth, far exceeded the actual 10-year Treasury rate after inflation surged, and that gap has since narrowed to roughly 4.75% actual versus 5.41% intrinsic.
  • High Yields Are Here to Stay — The authors estimate the natural inflation-adjusted rate on 10-year US Treasuries fell from about 5% in the early 1980s to roughly 1.6% in 2010-2015 and is now rising, reaching almost 2.6%. That implies a 10-year Treasury yield consistent with stable inflation of about 4.7%.
  • Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong? — An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.

AI Summary. The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.

Stijn Van Nieuwerburgh Brookings Papers on Economic Activity
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Stijn Van Nieuwerburgh projects ~$10.3T will be spent on the AI buildout over 2025–2032, averaging 3.63% of GDP. He estimates 2/3 of that spending reflects IT equipment and one-third real estate and associated power infrastructure.

How much of the planned data center pipeline gets built?

Core argument: Using Cleanview project-level data from July 2026, the authors estimate roughly 57 GW of operating U.S. data center capacity against a planned development pipeline of roughly 509 GW, which they stress is not a completion forecast.

The required investment is enormous. A representative 200 MW AI training campus costs roughly $8.2 billion, about two-thirds of which reflects IT equipment and one-third the real estate and associated power infrastructure. We estimate that 183 GW is completed by 2032 with a further 118 GW completed after 2032. This pipeline will trigger about $10.3 trillion dollars of investment over 2025–2032. At an average of 3.63% of GDP per year, the projected buildout would be larger relative to the economy than the major U.S. canal, railroad, electrification, highway, and telecommunications investment booms. It would double the electricity consumption of the entire U.S. residential sector.

Takeaways by Macro Roundup® AI

  1. Using Cleanview project-level data from July 2026, the authors estimate roughly 57 GW of operating U.S. data center capacity against a planned development pipeline of roughly 509 GW, which they stress is not a completion forecast.
  2. The authors’ central scenario allocates the announced pipeline so that 182.8 GW of additional U.S. capacity becomes operational during 2025–32, including 19.0 GW tied to projects already operational in 2025 or 2026.
  3. The authors’ scenario has 117.2 GW of planned data center capacity completed after 2032 and 226.9 GW never completed, applying lower realization rates to more distant and less fully documented projects.

Related Articles:

  • Rear Window — Major cloud providers posted annual revenue growth of 37% at Amazon Web Services, 43% at Microsoft Azure and 82% at Google Cloud, with rising revenue backlogs of $514bn and $496bn respectively at Google Cloud and Amazon Web Services. Earnings growth appears highly contingent on continued hyperscaler capital spending and research, which rose from $460bn to $870bn.
  • AI Set to be Largest CapEx Cycle Ever … and Soon Majority Externally Financed — Hyperscaler and data-center investment is tracking toward $1.5tn annually by 2030, which in real terms would exceed the 2005-06 housing boom, the 1990s fiber peak, and the 1882 railroad peak combined. External debt and equity are projected to fund close to 90% of the buildout, making it dependent on credit markets.
  • 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.

AI Summary. By manufacturing value added China has the world's largest manufacturing sector, with the US and European Union roughly co-equal and individually smaller; netting out intra-EU trade, the EU is the largest exporter of goods and services and the US a distant third. The author argues all three are vulnerable to weaponized interdependence, with China apparently least so.

Paul Krugman Krugman Wonks Out
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Product-level data suggest China is less dependent on the EU and the US than they are China, even though US and EU manufacturing output jointly exceeds that of China. Krugman argues that in this tripartite world, economic power may be increasingly downstream from a bloc’s economic resilience.

How do manufacturing and trade size shape vulnerability to weaponized interdependence?

Core argument: China has by far the world’s largest manufacturing sector by value added, while the US and EU are roughly co-equal, each individually smaller than China but larger than China combined.

If we look at manufacturing value added, China has by far the biggest manufacturing sector; the US and EU are roughly co-equal, both individually smaller than China but bigger combined. Netting out intra-EU exports, the EU is the world’s largest exporter of goods and services, with the US a distant third [see figures in gallery]. [The featured image, from the Mercator Institute for China Studies, shows that from 2000–2022 the number of product categories in which the US and EU depended on China rose, while the number in which China depended on them fell. The chart excludes textiles]. The Western economies are increasingly dependent on China, and if anything the US is more dependent than the EU [by this product-count measure]. Who is vulnerable here? The three superpowers are all vulnerable to weaponized interdependence, although apparently China less than the rest. What really scares me is Taiwan. Given time, we can reconstruct a semiconductor supply chain without Taiwan. But the few years it would take would be very ugly.

Takeaways by Macro Roundup® AI

  1. China has by far the world’s largest manufacturing sector by value added, while the US and EU are roughly co-equal, each individually smaller than China but larger than China combined.
  2. Netting out intra-EU exports, the EU is the world’s largest exporter of goods and services, with the US a distant third.
  3. Mercator Institute for China Studies figures show that from 2000 to 2022 the number of product categories in which the US and EU depended on China rose while the number in which China depended on them fell, excluding textiles.

Related Articles:

  • The Real China Trump Card — Among the world's 2,000 largest companies, U.S. firms generated 38% of global profits and firms based in allied countries 35%, while Chinese firms including Hong Kong generated 16%. The U.S. leads in 20 of 27 industries and China in three, with profits used as a measure of economic chokepoints.
  • How Should We Measure Economic Power? — The authors argue profits measure economic power because they show a firm can do what others can't, and by that metric U.S. firms dominate globally—with Japan and Europe significant and China second-tier—implying greater U.S. power than GDP or industrial output comparisons suggest. The gap favoring the U.S. is most pronounced in high-tech products.
  • How to Fight an Economic War — China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.

AI Summary. A projection estimates China gains about $1.13tn in annual export value by 2030 relative to baseline while the rest of the world loses about $5.1tn, including $2.25tn for the G7. The authors attribute the net global decline to trade shifting toward Chinese goods whose export prices keep falling.

Charles Austin Jordan and Logan Wright Rhodium Group
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China’s share of global exports by volume is on track to rise from 20% in 2025 to 28% by 2030. Yet China’s rising export share may depress the total value of global exports as lower-priced Chinese goods displace more expensive exports from other countries.

Do China's export share gains reduce global export values?

Core argument: The projection has China gaining roughly $1.13 trillion in annual export value by 2030 relative to the baseline scenario, while the rest of the world loses about $5.1 trillion.

The net result of our projection would suggest that China gains around $1.13 trillion in annual export value by 2030 relative to the baseline scenario, while the rest of the world loses around $5.1 trillion, with the G7 accounting for $2.25 trillion of those potential losses alone. This implies that China’s export share gains effectively destroy overall global trade values relative to the status quo due to continued declines in export prices. Regardless of which assumptions are used, China’s export share gains appear to reduce global total potential export values, because trade patterns are shifting toward Chinese goods that are declining in price.

Takeaways by Macro Roundup® AI

  1. The projection has China gaining roughly $1.13 trillion in annual export value by 2030 relative to the baseline scenario, while the rest of the world loses about $5.1 trillion.
  2. The G7 accounts for $2.25 trillion of the projected $5.1 trillion in export value losses borne by countries outside China.
  3. China’s export share gains appear to reduce global total potential export values regardless of the assumptions used, because trade patterns shift toward Chinese goods whose prices continue to decline.

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