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Is the Safety Margin of US Treasury Bonds Diminishing? - Conversable Economist
Traditionally, the US Treasury has been able to borrow with low interest rates, because US Treasury debt is viewed as ultra-safe and ultra-liquid. But the gap between the interest rate of US Treasury debt and corporate AAA-rated bonds has been diminishing. Indeed, Microsoft recently issued some long-term bonds that paid lower interest rates than Treasury
A Nobel for Innovation-Driven Economic Growth: Aghion, Howitt, and Mokyr - Conversable Economist
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025 was awarded this morning for "for having explained innovation-driven economic growth.” The award was divided between Joel Mokyr "“for having identified the prerequisites for sustained growth through technological progress” to Philippe Aghion and Peter Howitt “for the theory of sustained growth through
Some Economics of US Biofuels - Conversable Economist
Twenty years ago, with the Energy Policy Act of 2005, the US decided to encourage "biofuels" in a big way with the Renewable Fuel Standard (RFS) program, which started with RFS1 and later was amended to RFS2. Gabriel E. Lade and Aaron Smith provide an overview of what has happened since then in Biofuels: Past, Present,
When George Dantzig Optimized His Personal Diet Problem - Conversable Economist
The "diet problem" has a particular meaning in academic literature. We know nutritional ingredients and calorie counts in various foods. We know the price of these foods to the consumer. We know what combination of vitamins, minerals, and calories are needed to maintain health. With this information, what is the least-expensive diet sufficient for human
Financial Inclusion - Conversable Economist
Imagine for a moment what it would be like not to have a bank account, or a credit card--much less, say, the ability to make online payments, get interest on savings, take out a loan, have a credit score, have direct deposit of a paycheck, or have a retirement account or a mortgage. Being part
Save the Whales by Pricing the Ship Noise Externality - Conversable Economist
Ships play a central role in the global trade of goods, but they also make noise--which might affect undersea creatures like whales that depend on sound for communication and navigation. M. Scott Taylor investigates this issue in "Saving Killer Whales Without Sinking Trade: A market solution to noise pollution" (Property and Environment Research Center (PERC),
Mortgage Lock-In - Conversable Economist
The problem of "mortgage lock-in" arises when a homeowner has a mortgage that was obtained a few years back at a lower interest rate. If that homeowner wants to move to another place (often by using the equity in their current home for the down-payment), it would be necessary to obtain a new mortgage at
Do Rules to Limit High Government Debt Work? - Conversable Economist
Every government faces a temptation to make two popular choices at the same time: hold taxes lower and raise spending higher. But of course, the result is higher debt. Thus, a number of countries have been attempting to set up rules that would prevent governments from giving into temptation. One immediate challenge for such rules
Snapshots of the Global Robot Population - Conversable Economist
The International Federation of Robotics is a nonprofit but industry-based trade group. Each year the IFR issue a World Robotics Report, which costs way too much for me to get a copy. However, the report is accompanied by a useful press release with slides showing big-picture trends in the spread of robots around the world.
Measuring Benefits of High-Skilled Immigration - Conversable Economist
How can economists measure the benefits of high-skilled immigration? The challenge is to use real-world data to separate this immigration from other factors, recognizing that some anecdotes about particular high-skill immigrants doesn't offer real evidence, and that corellation is not causation. Economists often tackle questions like this by looking for a "natural experiment"--that is, some
50 Years Ago: When the US Encouraged Coal Use - Conversable Economist
Coal is the dirtiest of the fossil fuels, both for its contribution to the standard pollutants like particulates and sulfur, but also because it emits more carbon per unit of energy produces than natural gas or petroleum. Thus, it's good environmental news that, in the last couple of decades, US coal has declined to just
Recent Trends in US Antitrust Enforcement - Conversable Economist
The Biden administration appointed people to key antitrust positions in the Federal Trade Commission and the Antitrust Division at the US Department of Justice who, in general, promised to make antitrust regulation tougher. I've written here before about questions of doctrine: that is, how should antitrust cases be evaluated? But there's also a more basic
Some Trends in Global Debt from the IMF - Conversable Economist
The IMF has updated its Global Debt Database, and Vitor Gaspar, Carlos Eduardo Goncalves, and Marcos Poplawski-Ribeiro point out a few of big-picture changes in a short article "Global Debt Remains Above 235% of World GDP" (IMF Blog, September 17, 2025). Here's an overall view of global debt since 1950, measured as a share of global
Economics of Trade Sanctions - Conversable Economist
The exercise of US foreign policy (along with the European Union and the United Nations) has been increasingly characterized by the use (or threat) of trade sanctions. What do we know about how such sanctions work? Gabriel Felbermayr, T. Clifton Morgan, Constantinos Syropoulos, and Yoto V. Yotov review the evidence in "Economic Sanctions: Stylized Facts
Better Permitting and More Building: Possible? - Conversable Economist
It seems natural enough, at least based on US experience, to believe that building and permitting are in a natural opposition: that is, stronger permitting means less building. Zachary Liscow has been looking for a way out of this opposition. He spells out some of his thoughts in "Reforming Permitting to Build Infrastructure" (Hutchins Center
Predistribution, Not Redistribution, in the Nordic Countries - Conversable Economist
Maybe it's just because I live in Minnesota, a state where the differences between immigrants from Sweden, Norway, and Finland are still apparent in the names of towns and the surnames of people. But when I run into people who would prefer that the US distribution of income be more equal, they often point to
US Income Inequality Before Taxes and (Many) Transfers: Census Data - Conversable Economist
Each year, the US Census Bureau publishes three overview reports to update the annual data on income, poverty rates, and health insurance. Here, I focus on some figures from Income in the United States: 2024, by Melissa Kollar and Zach Scherer (September 2025, P60-286). Here's a figure showing several measures of pre-tax income inequality. It's
EU Productivity and Lack of Integration - Conversable Economist
Economic growth and productivity growth across the nations of the European Union has been lagging the US economy. What are the reasons and what might be done? A group of essays in the June 2025 issue of Finance & Development offers some insights. A common theme is that EU economic integration has not proceeded as
Interview with Dean Karlan: US Government Foreign Aid - Conversable Economist
Back in November 2022, Dean Karlan took the job as the first "chief economist" for USAID. In that position, he had a staff of about 30 whose task was to figure out the benefits and costs of different aid programs, with the goal over time of refocusing aid on problems and situations where the payoff
What Do Managers Do? - Conversable Economist
Economists have been thinking for a long time about the operation of buying and selling in markets. However, they have traditionally spent less time studying what happens inside a firm--a setting in which forces of supply and demand are replaced by managerial decision-making. Anyone who has had both a good boss and bad boss knows
ICYMI: Journal of Economic Perspectives Summer Issue Free Online - Conversable Economist
In the old days of publishing the Journal of Economic Perspectives on paper--like last year--I didn't worry about publishing an issue in August. Even if potentially interested readers were on vacation or away from the office, I figured that the physical paper copy of the journal would hang around in their mailbox, or perhaps in
Crypto, Stablecoins, and the Rise of Tokenization - Conversable Economist
Bitcoin and cryptocurrencies in general are no longer the bright shiny new thing. The Journal of Economic Perspectives, where I work as Managing Editor, was describing and discussing the crypto world a decade ago. What happened to all those predictions that Bitcoin would rapidly displace existing currencies? In "Crypto, tokenisation, and the future of payments."
Snapshots of Global Capital Markets - Conversable Economist
The Securities Industry and Financial Markets Association, typically referred to as SIFMA, is trade association: that is, it's an organization made up of investment banks, asset managers, brokers, and others. Among other rule-setting, lobbying, and public education missions, it publishes an annual databook: this year, the SIFMA Capital Markets Handbook 2025 (July 2025). Here are
Interview with John Haltiwanger: US Statistical Agencies - Conversable Economist
Both the budgets and methods of US statistical agencies like the Bureau of Labor Statistics and the Bureau of Economic Analysis have come under political challenge. this double-edged attack raises a question of sincerity: If the real goal is to enable these agencies to update their methods for the information age--for example, to rely less
Why Do Americans Work So Many Hours? - Conversable Economist
Compared to workers in most other high-income countries, Americans tend to work more hours per year. Here's a figure from the OECD, which is based on taking the total number of hours worked in an economy and dividing it by the number of workers for the most recent year available. Because different countries will measure
Why Is Productivity Falling in the US Construction Sector? - Conversable Economist
In the long run, the standard of living for people in an economy rises as the amount of output produced per hour of work--that is, productivity--rises. There's reason for concern when productivity in an industry falls for a sustained period of time. In partiuclar, productivity seems to be falling in construction of housing, at the
Interview with Gary Hoover: Teaching with Purpose - Conversable Economist
Scott Wolla of the St. Louis Fed interviews Gary Hoover on his thoughts about teaching economics ("Gary Hoover: Teaching with Purpose," July 1, 2025, transcript available). Here are a few excerpts, but there's more in the full version: How he got interested in economics I’m a student who is in high school, and I’m watching
Does the Invisible Hand Work For Honor, Too? A Thought from Montesquieu - Conversable Economist
One of the prevailing ideas that philosophers were trying out in the 17th and 18th century was that the line between personal interest and social good was not always clear-cut. Indeed, there were cases in which pursuit of personal interest was also of benefit to society as a whole. Here's an example from Montesquieu in
Some Economics of Leasing Antiquities - Conversable Economist
Here's the economic problem of antiquities: All over the world, there are historical artifacts buried under land or submerged underwater, or both. Also, there are museums and rich collectors all around the world who would like to possess these antiquities. But of course, the situatin here is more complex than basic supply and demand. Antiquities
In Praise of Editors - Conversable Economist
As someone who has spent nearly 40 years working as an editor, I'm of course continually on the lookout for statements that praise editors. I know, I know--you'd think it would be easy to find examples of such a widely held sentiment. But it's harder than you might think. However, in the 100th anniversary issue
Voltaire on the Civility of Markets - Conversable Economist
A person does not really read Voltaire's Philosophical Dictionary (1764)--or at least I don't --but instead surfs through it from time to time, trying to hit some of the high spots. Here are a couple of comments for reflection on a summer's day, from the 1901 translation by William Fleming. In the entry under "Presbyterian,"
Federal Reserve Independence: Not Just a Good Idea, It’s the Law - Conversable Economist
Back in 1974, in the aftermath of the OPEC oil embargo, the National Maximum Speed Law was passed by Congress and signed into law by President Richard Nixon. It required all states to enact a maximum speed limit of 55 miles per hour, or else to face a cutoff of federal highway funding. The goal
What Economic Ideas are True and Nontrivial? - Conversable Economist
Short answer: comparative advantage is a plausible candidate. This story is an old one, but perhaps it has become old enough that some readers will not be familiar with it. It's told in a 1969 address by Paul Samuelson (Samuelson, Paul A. 1969. “Presidential Address: The Way of the Economist.” In P. A. Samuelson (ed.),
Learning, AI, and John Searle’s Chinese Room - Conversable Economist
In a 1980 book, Minds, Brains, and Programs, the philosopher John Searle used what has become known as the "Chinese room analogy" to discuss the relationsihip between artificial intelligence and learning. Searle set up his discussion this way: Suppose that I’m locked in a room and given a large batch of Chinese writing. Suppose furthermore
Using Royalty Payments to Track Technological Leadership - Conversable Economist
It seems clear that China's economy is moving from being a technological follower, primarily using technology invented elsewhere, and moving toward generating a greater share of its own technology. But other than pointing to anecdotes or stories of specific companies, how might we measure the extent of this shift? François de Soyres, Ana Maria Santacreu, and Ethan
Summer 2025 Journal of Economic Perspectives Freely Available Online - Conversable Economist
I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided back in 2011–to my delight–that the journal would be freely available online, from the current issue all the way back to the first issue. You can download individual
Nathaniel Hawthorne on How the Invention of Iron Stoves Ruined Society - Conversable Economist
My tradition on this blog is to take a break (mostly!) from current events in the middle and later part of August. Instead, I pre-schedule daily posts based on things I read during the previous year about three of my preoccupations: economics, editing/writing, and academia. With the posts pre-scheduled, I can then relax more deeply
How Many Jobs Depend on Exports? - Conversable Economist
Some jobs can be traced to export industries: thus, reduce trade and these jobs are at risk--at least their current form. The International Labour Organization offers an estimate of how much employment in countries around the world is linked to their exports to the United States (World Employment and Social Outlook: May 2025 Update). As
Shifting Markers of Adulthood - Conversable Economist
A half-century ago, four markers were sometimes said to characterize adulthood: moving out of the parental home, getting a job, getting married, and having kids. How have those patterns evolved over time? Paul Hemez and Jonathan Vespa of the US Census Bureau provide some figures in "Significant Drop in Share of Young Adults Achieving Four
The US Auto Industry: Evolving, not Evaporating - Conversable Economist
One of those facts that "everyone knows" is that the US auto industry has been crushed by foreign competition. As Adam Ozimek points out in "Myths and Lessons from a Century of American Automaking" (Economic Innovation Institute, August 1, 2025), while the US car industry certainly no longer features large manufacturing plants in the city