“…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 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
“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 full-throated defense of economic dynamism.” - The Wall Street Journal
“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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…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

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Deciphering the fall and rise in the net capital share

Matthew Rognile Brookings Papers on Economic Activity

Date Posted:: June 1, 2015
Is Database:: Database

Rognile’s analysis of 7 large developed economies shows only housing has a long-term increase in capital’s share of income. Net capital income is low due to rapid obsolescence & returns aligned with labor, not capitalists @MatthewRognlie BrookingsPapers.

Rognlie's analysis of seven large developed economies (US, Japan, Germany, France, UK, Italy, and Canada) reveals that the only long-term increase in capital's share of income is in housing. By subtracting depreciation, he calculates net capital income and highlights that industries with short-lived assets like software show a high gross capital share due to capital's direct role in production. However, the net capital share remains low as returns are more aligned with labor, such as software engineers, rather than capitalists. This suggests that while capital's role in production is significant, its net contribution is diminished by rapid obsolescence, emphasizing the importance of understanding depreciation's impact on capital income distribution.

Rognlie subtracts depreciation in seven large developed economies (US, Japan, Germany, France, the UK, Italy, and Canada) to get net capital income, and finds that the only long-term rise in capital’s share of income is in housing. Rognile, Matthew, "Deciphering the fall and rise in the net capital share,"Brookings Papers on Economic Activity, March 19, 2015. Available at:http://www.brookings.edu/about/projects/bpea/papers/2015/land-prices-evolution-capitals-share"...For instance, in an industry where most of the output is produced by short-lived software, the gross capital share will be high, evincing the centrality of capital’s direct role in production. At the same time, the net capital share may be low, indicating that the returns from production ultimately go more to software engineers than capitalists—whose return from production is offset by a loss from capital that rapidly becomes obsolete...."

US Corporate Profits Surge To Record As Worker Payouts Wilt

Myles McCormick Financial Times

Date Posted:: August 28, 2026
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Corporate profits have risen to 18% of national income, their highest share since 1947, while labor’s share has fallen to 60%, a low not seen since the 1950s. The decline in labor’s share has accelerated over the past year.

Pre-tax earnings hit an annualised $4.8tn in the second quarter, or 18% of national income, according to Bureau of Economic Analysis data, the highest share since the aftermath of the second world war. Employees’ share from wages and benefits fell to 60%, the lowest level since the 1950s. “Regardless of what measure you look at, workers, in terms of employee compensation, have been receiving an increasingly small share of national income over time,” said Abiel Reinhart, an economist at JPMorgan. The decline in labour’s share of income has gained pace in the past five years and especially over the past 12 months.

The Rise Of The Deserving Rich

Economist Staff The Economist

Date Posted:: July 24, 2026
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An Economist analysis of the wealth of 7,000 billionaires finds that over the past decade, the share of billionaire wealth “derived from self-made entrepreneurs in competitive sectors has surged to an all-time high.”

Drawing on data from Forbes, a magazine, Hurun, a research firm, and Gapminder, a Swedish foundation, we have assembled a list of about 7,000 billionaires from the past 25 years. We call a billionaire’s wealth “uncompetitive” when it mainly comes from industries such as gambling, construction, defence, and raw materials. These sectors often depend on political access. We count inheritors in the “uncompetitive” category. From 2001, when our data begin, to 2014, the uncompetitive share of billionaire wealth rose slightly. Yet over the past decade, the share derived from self-made entrepreneurs in competitive sectors has surged to an all-time high. For the first time, half the wealth of the world’s billionaires is reasonably fairly earned. And since 2021, the total wealth derived from uncompetitive sectors has declined.

Takeaways by Macro Roundup^® AI

For the first time in the 25-year dataset, half of global billionaire wealth derives from self-made entrepreneurs in competitive sectors, marking a structural shift away from politically connected and inherited fortunes.
The uncompetitive share of billionaire wealth—spanning gambling, construction, defence, raw materials, and inheritance—rose modestly from 2001 to 2014 but has declined in absolute terms since 2021.
Inherited wealth, though typically lawfully held, represents a policy failure in wealth distribution, as heirs’ fortunes reflect birth advantage rather than competitive value creation.

Another Reason the Labor Share Keeps Falling: Taxes!

Owen Zidar and Eric Zwick The Everywhere Millionaire

Date Posted:: July 1, 2026
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Zidar & Zwick suggest about one‑third of the post‑1970s drop in labor’s share is due to stock‑based pay to workers, in addition to the one‑third they already attribute to pass‑through income. That leaves only around one‑third for genuine shifts in technology, power, etc.

In our data for 2017, after adjustments for the rise of pass-throughs, we report employee compensation of $7.2 trillion and corporate value added of $12.2 trillion. The unadjusted corporate profits number (which excludes partnership profits) is $1.7 trillion. If we could find around $200 billion of “missing” labor compensation, that would account for about a third of the fall in the labor share since the late 1970s. Thus, if workers owned a bit above 10% of those corporate profits via stock compensation, then that would cover the difference. Distributing this amount across the top 10% of public company employees, of which there are 4.2 million, this ownership would imply an additional $40,000 or so in pay. The aggregate numbers are thus quite plausible in terms of how much pay might have shifted to corporate profits serving as tax-preferred payments to high earners.

Takeaways by Macro Roundup^® AI

$200bn in missing labor compensation since the late 1970s drives roughly one-third of the labor share decline, reflecting tax-advantaged stock.
Top 10% of public company employees ($40k additional implicit pay via equity ownership) concentrate gains that would equal $200bn aggregate.
$12.2tn corporate value added vs. $7.2tn employee compensation reveals labor’s shrinking claim on output, as tax-preferred equity arrangements redirect worker.

Do Past Wealth Gaps Explain Modern Inequality? Evidence From Immigration To The United States

Brian Marein Wake Forest University

Date Posted:: June 30, 2026
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Except possibly at the very top of the distribution which SIPP cannot measure, the wealth of “new” Southern and Eastern European immigrants to the US has fully caught up with “old” immigrants. Wealth converges quickly once earnings inequality vanishes.

Inferring the determinants of long-run inequality from group-level data is complicated by the arrival of 30 million Europeans during the Age of Mass Migration (roughly 1850 to 1924), who are by construction included in average white wealth despite having no direct claim to the wealth accumulated by earlier Americans. By1920, nearly half of white adults were either foreign-born or had foreign-born parents. Using the United States Immigration Commission Reports (commonly known as the Dillingham Commission Reports), I document that immigrants at the turn of the twentieth century arrived with almost no wealth. [Thus] a large share of the white population started from a substantial wealth disadvantage. Northwestern Europeans comprised the overwhelming majority of earlier immigrants, dating back to the initial European settlement of North America, while Southern and Eastern Europeans predominated at the turn of the twentieth century. If initial wealth disadvantages persisted across generations, one would expect households of Southern or Eastern European ancestry to possess less wealth than those of Northwestern European ancestry, since their families arrived later and started with substantially fewer resources. In fact, they do not. On average, they are wealthier.

Takeaways by Macro Roundup^® AI

By 1920, 50% of white adults were foreign-born or had foreign-born parents, yet Southern and Eastern European descendants achieved wealth.
European immigrants arrived at the turn of the twentieth century with nearly zero wealth, yet their descendants’ wealth distributions converged.
White ancestry groups exhibit nearly identical wealth distributions by 1980–1990 despite staggered arrival times spanning 270+ years, while Black, Cuban.

The Great $110 Trillion Wealth Transfer Won’t Happen Any Time Soon

Rachel Louise Ensign and James Benedict Wall Street Journal

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

The age at which Americans are inheriting money has risen. According to Federal Reserve surveys, btw 1998 and 2010, Americans in their late 50s were most likely to report receiving an inheritance; by 2013–2022, that age had ticked up to the mid 60’s.

Fed data [indicates] that what is known as the bequeathable wealth rose from 256% of gross domestic product in 1997 to 424% in 2021, the last year of available data. A staggering 97% of that increase was due to wealth gains in households where the head of household was 55 or older. Older Americans may keep accumulating wealth, especially if the stock market keeps rising. But some will spend it on living costs and expensive long-term care, leaving less for heirs. When they die, many will leave their money to their spouses, who are often in their same generation. This year, around $1.3 trillion is expected to be passed onto spouses, compared with about $2 trillion to heirs in Gen X and younger generations, according to projections from research firm Cerulli Associates.

Takeaways by Macro Roundup^® AI

Bequeathable wealth surged to 424% of GDP in 2021 from 256% in 1997, with 97% of gains concentrated in households.
The wealthiest 10% of households age 55+ captured 75% of total bequeathable wealth gains since 1997, resulting in widening inequality.
Boomers accumulated $1tn+ in wealth during Q4 alone, outpacing all other generational groups, as stock and business valuations drive outsized.

Has Generational Progress Stalled? Income Growth Over Five Generations of Americans

Kevin Corinth and Jeff Larrimore Demography

Date Posted:: April 23, 2026
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As measured by the 36–40 cohort across generations, Americans’ real market income has continued to rise but at a slower pace. Accounting for taxes and transfers partially offsets the slowdown in the growth of market income.

We zoom in on a focal age range in people’s late 30s—an age at which we observe the five generations from the Greatest Generation (born 1901–1927) through the Millennial Generation (born 1981–1996)—and assess both whether generational progress is positive and the extent to which the rate of growth is speeding up or slowing down. Focusing first on median market income, there are two notable takeaways that apply for both the individual/couple and the household sharing units.The first is that generational progress has clearly slowed since the Baby Boom Generation, although it remains positive. Second, despite the perception that slowing generational progress is a recent phenomenon, the substantial slowdown did not start with Millennials but began a generation earlier with Generation X. Looking at the patterns formed in household market income by generation, the income of Baby Boomers in their late 30s was 31% above that for similarly aged adults in the Silent Generation. Progress slowed substantially for Generation X—their incomes increased by 10% relative to Baby Boomers—and then ticked up for Millennials, whose incomes rose by 15% relative to Generation X. Although market income is an important indicator of progress, it does not reflect the full set of resources that individuals have available for consumption. The slowdown in generational progress is softened when accounting for taxes and transfers.

Takeaways by Macro Roundup^® AI

Income growth for Americans in their late 30s declined 50% from the Silent Generation (born 1928–1945) to Millennials (born 1981–1996).
Wage growth deceleration across five generations results in widening inequality, with top earners capturing disproportionate income gains while median earners.
Workforce participation shifts and wage stagnation for Millennials vs. prior generations lead to delayed wealth accumulation and reduced intergenerational economic.

Rognile’s analysis of 7 large developed economies shows only housing has a long-term increase in capital’s share of income. Net capital income is low due to rapid obsolescence & returns aligned with labor, not capitalists @MatthewRognlie BrookingsPapers.

Corporate profits have risen to 18% of national income, their highest share since 1947, while labor’s share has fallen to 60%, a low not seen since the 1950s. The decline in labor’s share has accelerated over the past year.

Are record corporate profits coming at workers' expense?

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An Economist analysis of the wealth of 7,000 billionaires finds that over the past decade, the share of billionaire wealth “derived from self-made entrepreneurs in competitive sectors has surged to an all-time high.”

Does self-made wealth now dominate billionaire fortunes globally?

Takeaways by Macro Roundup® AI

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Zidar & Zwick suggest about one‑third of the post‑1970s drop in labor’s share is due to stock‑based pay to workers, in addition to the one‑third they already attribute to pass‑through income. That leaves only around one‑third for genuine shifts in technology, power, etc.

Does tax-preferred stock compensation explain the labor share decline?

Takeaways by Macro Roundup® AI

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Except possibly at the very top of the distribution which SIPP cannot measure, the wealth of “new” Southern and Eastern European immigrants to the US has fully caught up with “old” immigrants. Wealth converges quickly once earnings inequality vanishes.

Does initial wealth explain persistent inequality across immigrant groups?

Takeaways by Macro Roundup® AI

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The age at which Americans are inheriting money has risen. According to Federal Reserve surveys, btw 1998 and 2010, Americans in their late 50s were most likely to report receiving an inheritance; by 2013–2022, that age had ticked up to the mid 60’s.

Will the concentration of inherited wealth impact economic equality?

Takeaways by Macro Roundup® AI

Related Articles:

As measured by the 36–40 cohort across generations, Americans’ real market income has continued to rise but at a slower pace. Accounting for taxes and transfers partially offsets the slowdown in the growth of market income.

Takeaways by Macro Roundup® AI

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Takeaways by Macro Roundup^® AI

Takeaways by Macro Roundup^® AI

Takeaways by Macro Roundup^® AI

Takeaways by Macro Roundup^® AI

Takeaways by Macro Roundup^® AI