Edward Conard

Top Ten New York Times Bestselling Author

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

AI Summary. Chinese social media is saturated with viral posts about low wages, job scarcity, falling property values, and economic despair, despite increasingly aggressive censorship. The volume of pessimistic and satirical content surviving China's censorship apparatus signals the depth of public anxiety about the economy.

Li Yuan New York Times
Date Posted:

Attitudes expressed on Chinese social media are increasingly negative. Given that the “censorship apparatus still controls the internet,” the increasingly negative online sentiment, much of it about “economic despair,” is “striking,” Li Yuan remarks.

Is China's censorship failing to contain economic despair online?

Core argument: Viral feeds on RedNote, Douyin, and Weibo are saturated with posts about meager wages, scarce jobs, and falling property values, signaling that economic despair has become the dominant register of Chinese social media.

Across RedNote, Douyin, Weibo and other popular platforms, you can scroll endless posts about meager wages, scarce jobs, falling property values and fear about the future. Some turn their hardships into dark humor. Others hijack official posts and hashtags and turn propaganda into spectacles of mockery. China’s internet censorship has grown increasingly ruthless over the past decade. That makes the sheer volume of the pessimistic posts and sarcastic comments all the more striking. When [Li Yuan opened her] RedNote in recent weeks, [she] was surprised to find that the first 30 or so posts were nearly all about economic despair, many with hundreds or thousands of likes. The suggested searches could be even gloomier. “Is there a future for employment in China?” read one.

Takeaways by Macro Roundup® AI

  1. Viral feeds on RedNote, Douyin, and Weibo are saturated with posts about meager wages, scarce jobs, and falling property values, signaling that economic despair has become the dominant register of Chinese social media.
  2. Chinese citizens are hijacking official hashtags and propaganda posts to stage public mockery, converting state messaging into vehicles for dissent despite a decade of increasingly ruthless censorship.

Related Articles:

AI Summary. Countries with high debt and low productive capacity face the greatest adjustment costs when trade imbalances unwind. If the U.S. reduces its trade deficit while China maintains surpluses, a politically fragmented Europe risks absorbing larger deficits by default, accelerating deindustrialization and weaker growth.

Michael Pettis Foreign Affairs
Date Posted:

Pettis suggests that if the US reduces its trade deficit while China maintains huge surpluses, a politically fragmented Europe will likely end up absorbing larger deficits, driving reduced competitiveness, deindustrialization, and weaker growth.

Will Europe bear the cost of global trade rebalancing?

Core argument: Nations where debt has risen without a corresponding expansion in productive capacity face the steepest adjustment costs when global trade imbalances correct, making fiscal and industrial composition the primary vulnerability indicators.

The eurozone is the world’s third-largest economy and its second-largest source of demand, it has economic power at its disposal, but [likely not] the political ability to exercise this power, given its fragmented policymaking institutions and the often divergent interests of its member states. If the United States is able to reduce its trade deficit and expand its share of global manufacturing while China resists an equivalent contraction in its surpluses, a politically divided Europe could be forced to take on larger deficits almost by default. The costs could include deindustrialization, rising debt, and weaker growth. This process may have begun already.

Takeaways by Macro Roundup® AI

  1. Nations where debt has risen without a corresponding expansion in productive capacity face the steepest adjustment costs when global trade imbalances correct, making fiscal and industrial composition the primary vulnerability indicators.
  2. As the world’s third-largest economy and second-largest source of demand, the eurozone holds meaningful economic leverage in trade rebalancing but fragmented policymaking and divergent member-state interests severely limit its ability to deploy that power.
  3. If the U.S. shrinks its trade deficit while China resists equivalent surplus contraction, a politically divided Europe risks absorbing larger deficits by default, with deindustrialization, rising debt, and weaker growth as the likely consequences.

Related Articles:

  • Understanding Global Imbalances — Four economies—the United States, China, Germany, and Japan—account for roughly two-thirds of global imbalances, with current account surpluses and deficits now lasting twice as long as they did in the 1980s. Persistent imbalances have accumulated into large foreign asset and liability positions, with the United States holding net foreign liabilities
  • Imbalances Are Back On The Global Agenda — Global trade imbalances have returned as a major economic concern, with US net foreign liabilities rising to 24% of global output in 2024 from 6% in 2008, now financed by government borrowing rather than private debt. Historical patterns show current account imbalances reliably precede both protectionist policy and financial crisis.
  • Trade Intervention for Freer Trade — China comprises 17% of global GDP but 29% of manufacturing and 13% of consumption while the US is 26% of GDP, 16% of manufacturing, and 26% of consumption…

AI Summary. China's inflation-adjusted exchange rate has fallen sharply, giving Chinese manufacturers price discounts of 32% in electric vehicles, 38% in refrigerators, and 53% in shoes relative to foreign competitors. Persistent gaps of this magnitude indicate the yuan is significantly undervalued in real terms.

Greg Ip Wall Street Journal
Date Posted:

A GS analysis shows that Chinese manufacturers’ costs are 32% lower than those of their competitors, reflecting an artificially depressed yuan and price increases abroad due to supply chain disruptions and fiscal stimulus.

Is China's currency undervaluation distorting global manufacturing competition?

Core argument: China’s inflation-adjusted yuan exchange rate has plummeted since the pandemic, as goods prices fell domestically while rising in developed markets due to stimulus and supply-chain disruptions, creating a structural competitiveness advantage that nominal exchange rates have not corrected.

Goldman Sachs economists Kamakshya Trivedi and Hui Shan show goods prices have fallen in China since the pandemic while rising in developed markets because of stimulus and supply-chain disruptions. This means the inflation-adjusted yuan exchange rate has plummeted. This has increased China’s competitiveness. Goldman compared costs experienced by manufacturers in China, such as New Balance in shoes and Tesla in electric vehicles, with their costs elsewhere, and prices of Chinese companies, such as appliance manufacturer Haier, to foreign peers such as Siemens. China’s price discount is 32% in electric vehicles, 38% in refrigerators and 53% in shoes. In theory, such gaps should not persist if the yuan is fairly valued.

Takeaways by Macro Roundup® AI

  1. China’s inflation-adjusted yuan exchange rate has plummeted since the pandemic, as goods prices fell domestically while rising in developed markets due to stimulus and supply-chain disruptions, creating a structural competitiveness advantage that nominal exchange rates have not corrected.
  2. Goldman Sachs economists document Chinese price discounts of 32% in electric vehicles, 38% in refrigerators, and 53% in shoes versus foreign peers—gaps that economic theory holds should close if the yuan were fairly valued.

Related Articles:

  • The World Should Not Ignore China’s Undervalued Currency — China's currency is undervalued by 20–35%, based on a current account surplus of 4–6% of GDP once gold imports and misreported investment income are accounted for.
  • Global Views: Bending, Not Breaking — China's export-driven economy remains structurally imbalanced, with strong production and weak domestic demand set to push its current account surplus to unprecedented levels as a share of global GDP. This imbalance leaves the Chinese yuan undervalued by more than 20% against the US dollar, implying significant currency appreciation ahead.
  • Who Will Win The War Of Neo-Mercantilists? — Martin Wolf estimates that under reasonable assumptions, China should be earning ~$100B annually on her $4T of foreign assets. Yet, China shows an unexplained…

AI Summary. China has developed hypersonic glide vehicles capable of launching air-to-air weapons at targets up to 5,000 miles away, putting U.S. command-and-control aircraft, Guam, and Hawaii within range.

Gerry Doyle Bloomberg
Date Posted:

The Chinese military has developed hypersonic glide vehicles that can launch air-to-air weapons, which would allow them to hit high-value targets from thousands of miles away.

Does China's hypersonic missile threaten U.S. military dominance in the Pacific?

The Chinese military has developed hypersonic glide vehicles that can launch air-to-air weapons, an advancement meant to threaten high-value targets such as command-and-control aircraft thousands of miles away. A hypersonic glide vehicle deployed from a DF-17 missile could travel about 1,500 miles, just short of the distance from China to Guam. The DF-27 missile has a maximum range of about 5,000 miles, putting Hawaii in range.

Related Articles:

AI Summary. China's youth unemployment rate rose to 17.9% in July, driven by a record influx of university graduates entering an already saturated labour market.

Sherry Wang South China Morning Post
Date Posted:

China’s youth unemployment (16–24) climbed to 17.9% in July, on par with July 2025 and up 3pp from the previous month, as 12.7mm new university graduates entered the workforce – ~4% more than last year, superimposed on a slowing economy.

Does record graduate supply outpace job creation in China's economy?

Core argument: China’s youth unemployment rate (ages 16–24, excluding students) jumped 3 percentage points to 17.9% in July, as a record graduate cohort entered a saturated labour market and reversed three consecutive months of decline.

China’s youth jobless rate climbed to 17.9% in July, as a record wave of university graduates enters an already crowded labour market. The jobless rate for those aged 16 to 24, excluding students, rose 3 percentage points from 14.9% in June – the last of three straight months of contraction – according to data released by the National Bureau of Statistics on Wednesday. The rate last July was 17.8% and it then climbed to 18.9% the following month – the highest level since Beijing revised its methodology to exclude students in December 2023.

Takeaways by Macro Roundup® AI

  1. China’s youth unemployment rate (ages 16–24, excluding students) jumped 3 percentage points to 17.9% in July, as a record graduate cohort entered a saturated labour market and reversed three consecutive months of decline.
  2. At 17.9%, China’s July youth unemployment rate approaches the post-methodology-revision peak of 18.9% set in August 2023, confirming that annual graduate-cycle labour market stress remains structurally unresolved.

Related Articles:

  • China’s Great Jobs Squeeze — Over 53mn Chinese workers are employed in food delivery and ridesharing, with flexible and gig work projected to reach 320mn workers, reflecting weak aggregate demand that reduces worker bargaining power and forces acceptance of underemployment.
  • The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism — China's broad subsidies keep ~30% of industrial companies alive despite negative producer prices, flooding global markets with cheap manufactured goods that erode domestic manufacturing in importing countries.
  • Chinese Student High-Flyers Set Sights On Police and Military Academies — Top-scoring Chinese students are increasingly choosing police and military academies over elite universities, with admission scores for some programmes reaching 650+/750 — placing them within 3 points of the country's most prestigious university. Public-sector job security is driving high achievers toward state institutions, with military academy entrants ranking on average

AI Summary. AI model pricing is converging toward commodity levels, where an 80% annual price decline requires 400% unit growth just to maintain flat revenue. Ceding lower-tier markets to defend premium pricing has historically failed against low-cost competitors, making trillion-dollar valuations difficult to sustain alongside heavy capital spending.

Paul Kedrosky Applied Complexity
Date Posted:

US labs have “conceded commoditization” for models behind the frontier, while still trying to “preserve scarcity rents” for their frontier models. Kedrosky warns “this market-ceding tactic has failed in most markets historically, especially when competing with China.”

Does AI pricing collapse force a choice between growth and profitability?

Core argument: DeepSeek forced every Western lab to justify higher costs, then demonstrated retained pricing power by tripling effective output price while remaining within the low-cost band—exposing the fragility of Western labs’ commodity-tier positioning.

Good-enough models are converging in capability and price. That makes model switching easier and durable margins harder to defend. US labs are cutting lower- and mid-tier offerings while keeping their best models expensive. They are conceding commoditization below the frontier while trying to preserve scarcity rents at the top. This market-ceding tactic has failed in most markets historically, especially when competing with China. This is irreconcilable with trillion-dollar valuations and high & growing debt loads. OpenAI and Anthropic must finance enormous capital spending while competition pushes the models likely to generate the most volume toward commodity pricing. An 80% year-over-year price decline requires 400% unit growth just to stand still, and much more to deliver overall growth.

Takeaways by Macro Roundup® AI

  1. DeepSeek forced every Western lab to justify higher costs, then demonstrated retained pricing power by tripling effective output price while remaining within the low-cost band—exposing the fragility of Western labs’ commodity-tier positioning.
  2. U.S. labs ceding mid- and lower-tier segments to defend frontier scarcity rents repeats a market-retreat pattern that has historically failed against low-cost competitors, compounding capital-spending strain at OpenAI and Anthropic where an 80% annual price decline requires 400% unit growth merely to sustain revenue.

Related Articles:

  • OpenAI and Anthropic In Price War as Chinese AI Rivals Gain Ground — AI model pricing is falling as competition intensifies, with leading models cutting token costs by up to 80%. Higher-priced models can deliver lower total costs by completing tasks in fewer tokens or attempts.
  • Who’s Afraid of Chinese Models? — Frontier AI labs can sustain lower inference prices as inference revenue scales faster than training costs, making high per-token margins less necessary to fund model development.
  • The AI Trade Is Losing One of Its Key Signals — AI token prices have fallen over 90% while total spending has roughly doubled, expanding the market overall. However, a 46% gap between AI investment and actual sales — wider than the 32% divergence seen during the 2001 telecom collapse — raises the risk that current infrastructure spending is outpacing real

AI Summary. China's broad subsidies keep ~30% of industrial companies alive despite negative producer prices, flooding global markets with cheap manufactured goods that erode domestic manufacturing in importing countries.

Michael Cembalest J.P. Morgan
Date Posted:

Cembalest notes according to Chinese data, ~30% of Chinese industrial companies are “unprofitable zombies” that survive due to broad-based subsidies; for example, 58% of new Chinese bank loans are extended at or under its prime rate of 3%.

Does subsidizing unprofitable factories harm global manufacturing more than domestic growth?

Core argument: ~30% of Chinese industrial companies operate as unprofitable zombies sustained by state subsidies that dwarf those of any other economy, preventing the capacity reduction that negative producer prices would otherwise force.

Normally, a prolonged period of negative industrial producer prices would lead to competition and reduced capacity. Not in China, however; instead, ~30% of Chinese industrial companies are unprofitable zombies that survive due to a broad-based subsidy approach that dwarfs the rest of the world. Countries that experienced large increases in manufactured imports from China also experienced slowdowns in domestic manufacturing. From 2021 to 2024, as Chinese imports to the ASEAN region increased, every ASEAN country except for Brunei, Cambodia, and Laos experienced a decline in their manufacturing share of GDP.

Takeaways by Macro Roundup® AI

  1. ~30% of Chinese industrial companies operate as unprofitable zombies sustained by state subsidies that dwarf those of any other economy, preventing the capacity reduction that negative producer prices would otherwise force.

Related Articles:

  • China’s Next-Generation Industrial Policy — China's exports are shifting away from consumer goods and toward intermediate inputs and capital goods, with those categories rising 26% and 32% respectively over three years. This reflects a strategy of progressively localizing entire supply chains, embedding China deeper into global manufacturing systems as a supplier of components and machinery
  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — GS estimates that for every 1pp export-driven increase in Chinese GDP, advanced economies experience a 0.1–0.3pp drag. “China Shock 2.0 is likely to crowd out…
  • Europe Has No Choice But To Intervene On Trade — Pettis argues that unless the EU is “willing to dismantle its welfare system and force down wages relative to productivity to restore competitiveness,” it must…

AI Summary. Over 53mn Chinese workers are employed in food delivery and ridesharing, with flexible and gig work projected to reach 320mn workers, reflecting weak aggregate demand that reduces worker bargaining power and forces acceptance of underemployment.

Thomas Hale and William Langley Financial Times
Date Posted:

There are ~320mm “flexible workers” in China including ~53mm food delivery or rideshare drivers whose ranks have grown by ~10mm in the last two years. Flexible work is serving as a “shock absorber” in the face of broad-based labor market weakness.

Does weak demand push workers into lower-paying gig jobs?

Core argument: Flexible employment in China is on track to reach 320mn workers in 2025, up from 280mn the prior year—a 14% rise that reflects broad labour market weakness rather than platform-driven opportunity.

Flexible employment, an official term that is vaguely defined, implies a broader scope than gig work. It stood at 200mm in 2021 [including] part-time work and self-employment as well as “new forms of employment.” More than 53mm people as of 2025 work as food delivery or ridesharing drivers in China, up 10mm in two years, estimates the China New Employment Forms Research Center. [They] estimate that flexible employment will hit 320mm this year, up from 280mm last year. Andrew Batson, China research director at Gavekal, suggests flexible employment and gig work are “more of a symptom of broad-based labour market weakness in China than a totally independent development…Because aggregate demand is low, the bargaining power of workers is weaker, and they have to accept more underemployment and less favourable working conditions."

Takeaways by Macro Roundup® AI

  1. Flexible employment in China is on track to reach 320mn workers in 2025, up from 280mn the prior year—a 14% rise that reflects broad labour market weakness rather than platform-driven opportunity.
  2. Over 53mn Chinese workers are employed as food delivery or ridesharing drivers as of 2025, a figure that has grown by 10mn in two years, driven by weak aggregate demand forcing workers into underemployment.

Related Articles:

  • China’s Youth Unemployment Rate Edges Down In May As Economic Strains Persist — China's youth unemployment rate (ages 16–24, excluding students) fell to 15.6% in May but remains above the 14.9% recorded a year earlier. A record 12.7m graduates entering the labor market this summer is expected to tighten conditions further.
  • Chinese Student High-Flyers Set Sights On Police and Military Academies — Top-scoring Chinese students are increasingly choosing police and military academies over elite universities, with admission scores for some programmes reaching 650+/750 — placing them within 3 points of the country's most prestigious university. Public-sector job security is driving high achievers toward state institutions, with military academy entrants ranking on average
  • China Says Hostile Foreign Forces Are Driving Its Youth to Slack Off — Youth unemployment and disillusionment in China have driven millions of young people to reject work and ambition entirely. The Chinese government attributes this trend to foreign ideological influence rather than domestic economic conditions such as scarce well-paying jobs.