“…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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“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
“…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 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 represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“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

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Forget AI. The California Job Market Is Powered By Healthcare

Kenan Fikri and Thomas Cronin Agglomerations

Date Posted:: May 15, 2026

California is trading high wage private sector jobs for lower wage jobs in the healthcare sector, which now account for 17.4% of all jobs in CA, up 3pp in four years – twice the national growth rate.

California’s population is not especially old or feeble. Only 16.5% of its population is 65 or older, making it the sixth-youngest state on this measure. Californians also report fewer chronic health conditions than almost anywhere else. So why is its healthcare sector so mighty? One plausible partial explanation is that state policies are driving the outcome — in other words, that government subsidies are allowing more people to access more healthcare and social support, stoking demand. Enrollment in Medi-Cal, the state’s medicaid program, has increased significantly over the past decade as the state has continuously expanded coverage, including in recent years to undocumented populations. As a result, only 5.9% of Californians went without health insurance in 2024, a record low. The extensive margin (new enrollment) isn’t the only one at work; the intensive margin (use of healthcare services) is too. The state legislature has noted that Medi-Cal spending per enrollee is increasing even faster than the number of enrolled. Both greater utilization and greater coverage are driving demand and creating jobs in the process.

Takeaways by Macro Roundup^® AI

California's uninsured rate fell to 5.9% in 2024 vs. higher national levels, driven by Medi-Cal expansion to undocumented populations and.
Medi-Cal spending per enrollee is rising faster than enrollment growth, leading to increased healthcare utilization and job creation across therapy.
The $4.6bn Children and Youth Behavioral Health Initiative launched in 2021 drives therapy job expansion by connecting youth to mental.

Higher Utilisation Explains The Recent Surge In Productivity Growth

Shane Boyle, John Fernald and Huiyu Li Center For Economic and Policy Research

Date Posted:: August 5, 2026
Is Database:: Database

US labor productivity has accelerated, with output per hour growing at a mean annual rate of 2.5% btw 2023–2026Q1, ~1pp above its 2005–2019 pace. The gains have largely been driven by higher input utilisation, which is ‘inherently temporary.”

Input utilisation is not observed directly for the entire economy; it must be inferred. Consider a firm that wants to meet strong demand but has a given capital stock, workforce, and technology. It can ask its existing workers to work longer (which we observe). It can also run its capital longer. Each margin is costly, for example, overtime pay, so firms typically use all of them at once. The observed margin serves as a proxy for the unobserved ones. The method infers changes in industry utilisation from observed movements in hours per worker, scaled by an estimated pass-through of those movements into labour productivity. Industry estimates are aggregated using Domar weights, which reflect each industry’s importance. The stacked bars in Figure 2 show measured TFP growth split into [Fernald's] measure of utilisation growth in light grey and utilisation-adjusted TFP growth in dark grey. In 2023, utilisation growth was a drag on measured TFP growth, and utilisation-adjusted TFP growth soared. Since the beginning of 2024, however, utilisation accounts for essentially all TFP growth. For now, the measured productivity gains appear to derive from “working harder” rather than “smarter.”

Takeaways by Macro Roundup^® AI

Fernald’s utilisation measure infers economy-wide input intensity from observed hours-per-worker movements, scaled by estimated pass-through to labour productivity and aggregated across industries via Domar weights—capturing the unobserved margins of worker effort and capital run-time.

Why Wages And Productivity Look Set To Diverge Further

Joel Suss Financial Times

Date Posted:: July 27, 2026
Is Database:: Database
Is Important:: Important

In advanced economies, increases in labor productivity growth have decoupled from real wage growth, especially post-1980.

In the US, Europe and Japan, pay growth has decoupled from productivity growth, with the latter having pulled ahead. US Labour productivity — measured as real GDP per hour worked — is now more than five times greater than in 1947, whereas real hourly compensation is only about three times greater. Median wage growth has lagged even further behind productivity growth, with inequality pushing the average wage higher than the median. (The figures above show average rather than median wages; plotting median wages would show an even greater divergence.)

What the World Cup Revealed About America

Jason Thomas Carlyle

Date Posted:: July 21, 2026
Is Database:: Database
Is Important:: Important

Citing the spending of the top 45mm US households, Jason Thomas argues that US economic growth could be characterized less as ‘k-shaped’ than “travelling at two speeds, one roughly the same rate as Europe’s and another that’s racing far ahead.”

Roughly 73 million US households have retirement accounts (primarily defined-contribution plans like 401ks) that consist primarily of claims on businesses whose revenue growth and market values provide another hedge against inflation. Balances in defined contribution plans have increased by $6.7 trillion (+12.7%, annually compounded) since the start of 2019. US personal savings rates have fallen sharply over the past year (from 5.5% in April 2025 to 3% in May 2026) but that seems entirely rational. If your retirement balance is far above where you expected it to be, why not spend a bit more of your current income than previously intended? If we net across these overlapping cohorts and exclude recent first-time home purchases, we’re left with 45 million households that combine to account for nearly $15 trillion in annual outlays. That’s an extraordinary sum, equal to nearly 3x the size of the entire German economy and 70% of the GDP of China. And this third of the population has not only been insulated from the inflation shock but also exhibits the propensity to spend out of wealth and income to an extent that’s sustained a far higher rate of GDP growth than observed in economies with comparable living standards.

Takeaways by Macro Roundup^® AI

Balances in U.S. defined-contribution retirement plans have risen $6.7 trillion (+12.7% annually compounded) since early 2019, insulating roughly 73 million households from inflation and supporting elevated consumer spending out of accumulated wealth.
The 45 million U.S. households combining wealth insulation with high spending propensity account for approximately $15 trillion in annual outlays—nearly 3× Germany’s entire economy and 70% of China’s GDP—sustaining U.S. GDP growth above peers at comparable living standards.
The U.S. personal savings rate declined 2.5 percentage points to 3%, a rational response by households whose retirement balances substantially exceed prior expectations, substituting wealth appreciation for current-income saving.

Cataloging Growth: A Re-Evaluation of 1900–1990

Verónica Bäcker-Peral and Benjamin Wittenbrink Massachusetts Institute of Technology

Date Posted:: July 20, 2026
Is Database:: Database
Is Important:: Important

Using 5.1mm Sears catalog listings and LLM-based hedonic estimation, this study finds real goods consumption grew 39-fold from 1900 to 1990, not 10.3-fold as official data imply, with the largest mismeasurement concentrated before WWII.

Measuring real GDP growth requires distinguishing changes in prices from changes in product quality... systematic quality adjustment. price indexes are unavailable for much of the twentieth century. We construct a new quality-adjusted price index using 5.1 million product listings from Sears catalogs, 1900–1990. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators between 1900 and 1990, real goods consumption grew by a factor of 39 using our index,compared with a factor of 10.3 using standard goods deflators. Figure 5 shows our estimates of the cost-of-living index for consumer goods in the solid red line. The dashed black line shows average cumulated price changes for the same sample of consumer goods. The gap.is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.As Gordon puts it, 'the history of price changes from 1914 to 1947 [is] the black hole where little is known.' This paper sheds light on that black hole. We estimate average annual real goods consumption growth of 5.4% for 1900-1939 and 4.2% for 1946-1980... the era of fastest growth was in the prewar, not postwar, contrary to conventional estimates.

Takeaways by Macro Roundup^® AI

A quality-adjusted price index built from 5.1 million Sears catalog listings shows real U.S. goods consumption grew 39x over 1900–1990—nearly four times the 10.3x implied by conventional deflators—driven by systematic understatement of quality improvements.
Pre-war real goods consumption grew at 5.4% annually (1900–1939), outpacing the post-war rate of 4.2% (1946–1980) and reversing the consensus that the post-war decades represented peak U.S. consumption growth.
Conventional price deflators overstate twentieth-century goods inflation by failing to capture quality improvements, causing standard GDP estimates to materially undercount real consumption gains across the entire period.

Can Africa Take The Asian Path To Growth?

Economist Staff The Economist

Date Posted:: July 15, 2026
Is Database:: Database

Most Sub-Saharan African countries had lower agricultural TFP in 2023 than they had a decade earlier. Btw 2008 and 2019, in the face of a rapidly rising population, small farms’ yields were falling by 3 to 4% per year.

In aggregate [sub-Saharan Africa's] farmers are growing more cereals, such as maize (corn) and rice, than ever: nearly five times as much as in the 1960s. But most of those gains came from cultivating more land, which cannot go on for ever. The amount of arable land per person has been falling for decades, and now sits at roughly the global average. That might not matter if farmers were also growing more crops per hectare. But recently gentle growth in agricultural productivity has given way to stagnation, perhaps even decline. Consider figures drawn from national statistics in Africa by the Food and Agriculture Organisation. Cereal yields did not grow between 2020 and 2024, the latest data point. Nor did total factor productivity (TFP), a measure of how efficiently inputs of all kinds (such as labour and machinery) are turned into produce. Most African countries had lower agricultural TFP in 2023 than a decade before.

Takeaways by Macro Roundup^® AI

Sub-Saharan African cereal production grew 5x since the 1960s, but stagnant yields 2020–2024 reveal productivity gains have plateaued, limiting further.
Agricultural total factor productivity declined in most African countries 2013–2023 vs. the prior decade, driving efficiency losses that constrain output.
Falling arable land per person across Africa results in structural dependence on yield improvements, yet cereal productivity stagnation signals the.

AI, Immigration, and Collapsing Labor Force Participation

Paul Kedrosky Applied Complexity

Date Posted:: July 8, 2026
Is Database:: Database

Overall LFP is at a 50-year low. Kedrosky warns, “As fewer adults work or seek work, a larger fraction of voters experience the economy mostly as consumers, retirees, or rentiers, not as workers…[which] changes incentives around….taxation and redistribution.”

As fewer adults work or seek work, a larger fraction of voters experience the economy mostly as consumers, retirees, or rentiers, not as workers. That changes political incentives around wages, immigration, AI, taxation, and redistribution. The economy becomes increasingly dependent on a shrinking core. A shrinking group of workers generates the income, taxes, and innovation that support a growing number of non-workers. The economy becomes more fragile because labor shocks are concentrated among fewer participants. Capital must increasingly substitute for labor. Labor scarcity raises the return on automation, AI, robotics, and software. The AI bet becomes as much about compensating for workers' absence as simple replacement. Growth increasingly depends on productivity, on not participation. Any [productivity] miss will be much more consequential than in the past, given that labor no longer picks up the slack.

Takeaways by Macro Roundup^® AI

Declining labor force participation concentrates income and tax generation among fewer workers, driving fiscal fragility and heightened vulnerability to productivity.
Shrinking workforce participation shifts voter incentives toward consumption and capital returns over wage growth, leading to political realignment on taxation.

California is trading high wage private sector jobs for lower wage jobs in the healthcare sector, which now account for 17.4% of all jobs in CA, up 3pp in four years – twice the national growth rate.

Does state healthcare spending create jobs or just shift costs?

Takeaways by Macro Roundup® AI

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US labor productivity has accelerated, with output per hour growing at a mean annual rate of 2.5% btw 2023–2026Q1, ~1pp above its 2005–2019 pace. The gains have largely been driven by higher input utilisation, which is ‘inherently temporary.”

Is recent productivity growth real or just higher input utilisation?

Takeaways by Macro Roundup® AI

Related Articles:

In advanced economies, increases in labor productivity growth have decoupled from real wage growth, especially post-1980.

Related Articles:

Citing the spending of the top 45mm US households, Jason Thomas argues that US economic growth could be characterized less as ‘k-shaped’ than “travelling at two speeds, one roughly the same rate as Europe’s and another that’s racing far ahead.”

Is wealth-driven spending masking underlying economic weakness in the U.S.?

Takeaways by Macro Roundup® AI

Related Articles:

Using 5.1mm Sears catalog listings and LLM-based hedonic estimation, this study finds real goods consumption grew 39-fold from 1900 to 1990, not 10.3-fold as official data imply, with the largest mismeasurement concentrated before WWII.

Does conventional measurement underestimate pre-war economic growth?

Takeaways by Macro Roundup® AI

Related Articles:

Most Sub-Saharan African countries had lower agricultural TFP in 2023 than they had a decade earlier. Btw 2008 and 2019, in the face of a rapidly rising population, small farms’ yields were falling by 3 to 4% per year.

Is African agriculture repeating Asia's mistakes instead of learning from its successes?

Takeaways by Macro Roundup® AI

Related Articles:

Overall LFP is at a 50-year low. Kedrosky warns, “As fewer adults work or seek work, a larger fraction of voters experience the economy mostly as consumers, retirees, or rentiers, not as workers…[which] changes incentives around….taxation and redistribution.”

Does productivity growth become the economy's only growth engine as workers decline?

Takeaways by Macro Roundup® AI

Related Articles:

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