Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “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
  • “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 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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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
  • “…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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a 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

AI Summary. Resource utilization growth from late 2024 through early 2026 ranks among the fastest 5-quarter stretches since 1947, driven by a rise in average weekly hours worked rather than improvements in unemployment or manufacturing capacity.

Matt Klein The Overshoot
Date Posted:

The recent growth contribution from rising utilization, as measured by the FRBSF, is outsized “except for the brisk—and unsustainable— growth that characterized the mid-1960s and parts of the 1970s.”

Core argument: U.S. manufacturing capacity utilization declined steadily from its 2021H2–2022H1 post-pandemic peak through 2024Q4, as rising output was offset by parallel capacity expansion, leaving aggregate utilization relatively depressed.

Outside of periods when the economy was in the midst of recovering from a downturn, the growth contribution from rising “resource utilization” in 2024Q4-2026Q1 has been larger than over almost any other 5-quarter stretch since 1947, according to the SF Fed model. While the absolute level of this estimate of “resource utilization”, based on cumulative growth since 1947, remains relatively low, the recent pace of growth has been rapid. The main precedents were the periods of brisk—and unsustainable— growth that characterized the mid-1960s and parts of the 1970s. I was puzzled by this at first, since it does not fit with other data we have such as the unemployment rate or industrial capacity utilization. Neither unemployment nor underemployment have worsened since 2023, but they have not dramatically improved, either. Meanwhile, the Fed’s estimate of manufacturing capacity utilization ground steadily lower from the post-pandemic peak in 2021H2-2022H1 until 2024Q4, where it has remained ever since. (Manufacturing production itself has done much better, but the rise in output has coincided with an increase in capacity, hence the relatively low level of aggregate capacity utilization.) The explanation is that the SF Fed measure is not based on those indicators, but on a modified version of the average worker’s weekly hours.

Takeaways by Macro Roundup® AI

  1. U.S. manufacturing capacity utilization declined steadily from its 2021H2–2022H1 post-pandemic peak through 2024Q4, as rising output was offset by parallel capacity expansion, leaving aggregate utilization relatively depressed.

Related Articles:

  • AI and Productivity — Rising US labor productivity is driven by higher capital utilization—factories, servers, and hotel rooms running harder—rather than new investment or efficiency gains at the individual task level.
  • Have We Entered an Era of High Productivity Growth? — Labor productivity data show a 57% probability the U.S. economy has entered a high-growth regime, but efficiency-based measures show only 21%, mirroring the mixed signals seen in the mid-1990s technology boom before sustained productivity gains became clear.
  • America Is Experiencing A Productivity Miracle — Productivity gains in America are concentrated in professional services and management—sectors that use technology intensively rather than produce it—with additional momentum from energy, where shale extraction and liquefied natural gas exports have expanded output and revenue.
Showing 882 database articles primarily about either GDP, Business Cycle, Financial Markets, Growth, Housing, Inflation, Savings Glut/Trade Deficit, or Trade (not deficits)