“…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
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“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
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“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 fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…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

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Japan’s 10-Year Bond Yield Hits 3% for First Time Since 1996

John Cheng Bloomberg

Date Posted:: September 1, 2026

Japan’s 10-year government bond yield rose 6bp to hit 3% for the first time since 1996.

Japan’s 10-year government bond yield touched 3% for the first time this century, an important milestone for a debt market that is returning to normality after benchmark borrowing costs languished near zero for years. The yield rose as much as six basis points to 3% on Tuesday, the highest since 1996. It was half this level around this time last year, underscoring the speed of the change, which is reverberating through Japan’s economy and global financial markets.

Takeaways by Macro Roundup^® AI

Japan’s 10-year government bond yield reached 3% for the first time since 1996, doubling within a single year and marking a decisive break from the near-zero rate regime that defined Japanese monetary policy for decades.
Japan’s 10-year yield has risen approximately 150 basis points in roughly 12 months, a normalization pace rapid enough to transmit material stress across Japan’s domestic economy and global financial markets.

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.

Japan’s 10-year government bond yield rose 6bp to hit 3% for the first time since 1996.

Is Japan's debt crisis finally forcing an end to ultra-low rates?

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

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

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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

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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

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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

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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

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