June 2026 links
Increasingly agreed, and in general my views are slowly updating towards the caution position.
I wonder if consciousness is the answer to the basic argument. Our free will stems from being conscious, so causa sui doesn't apply?
Yes and this is consistent with a scenario where L share of Y plummets. The majority of income will be derived from capital ownership, made easier by lower Coasian transaction costs (making production a lot less concentrated amongst firms), so K share surges. We're already seeing a rise in startup formation.
To what extent does management contribute to the TFP gaps between countries?
I repeat: we are not in cultural decline.
Plus the incentives lie against publishing null results, and these results are also consistent with the effect sizes prevalent in this nascent literature. However student wellbeing does improve, although power and robustness might be an issue here. Here they found "in-school phone use fell substantially in treatment schools relative to control" yet only a rise in mean test scores around 0.06 s.d. in the treated group relative to control. Also here and here. The effect sizes are either tiny or null. Hence I see the crusade against phones as the latest moral panic, which might be trivial yet politicians are using this to clamp down on free speech (e.g. UK OSA) or anonymity rights.
AI clearly poses immense cybersecurity risks (a robotics example here), yet what is the net effect?
This echoes my argument on the importance of myth in incentivising moral conduct.
US electricity prices flat since June. Whilst hetereogeneity in the effects across countries are likely, it appears that the Iran shock is being contained.
After the fall of the Roman Empire, it appears that Moorish Spain and Frankish Europe were the wealthiest parts of Europe.
Decentralised fact-checking works. Alongside Grok, we should see an improvement in the social media discourse.
"China’s households spend on average 17.1% of their annual income and 7.9% of their total annual expenditures on education". This likely contributes to the above average mean IQ scores of East Asians, albeit the costs are in part a function of policy. The longstanding dominance of Confucianism in tandem with the path dependency of human capital investments as implied by Becker's intergenerational model means environment plays a large role despite heritability. It's important for the discourse to not do a complete reversal on this. As I keep emphasising, crude hereditarianism understates the variation within groups.
We should assume fiscal dominance by default. Of course this yields implications for monetary policy too.
A contrarian view that China’s GDP is underestimated. GDP is a notoriously noisy variable, so augmenting it with proxies correlated 0.9 with GDP reduces this variance, which is why I think HDI is a pretty good indicator of living standards. On this measure, China is inches away from having a “very high” HDI (i.e. a developed nation), and it compares to southeastern Europe on this front. With incremental reforms to education, China becomes a “very high” HDI country overnight. Intuitively this actually makes sense to me - a typical residential area appears to be in a better state than most of Russia.
An argument that Berkshire Hathaway's performance is mainly due to a strategy centred on leverage. If this is the case, it suggests that Buffet's overperformance was in large part a function of the low and stable interest rate era?
The immense fall in global poverty over the last century occured within cohorts too.
Peer effects in education. Worth noting that a large part of the human capital gains from education is due to enhanced networks, and the incentives for prosocial behaviour inherent. The gains to networking increases as you move up the education ladder, which is why it's vital for the talented and ambitious to be encouraged to go to university. For these reasons I'm turning against the signalling hypothesis.
Is the secular decline in the labour share an accounting change?
ChatGPT 5.5 reckons that the optimal TFR is below replacement rate. However the optimal rate increases as the motherhood penalty declines. It seems that cultural change and policy should offset this at least to the extent we get replacement fertility?
On positive alignment. Again a recurring theme emerges: this issue will be solved via markets and decentralised institutions, not via bans or pauses.
Hence why utilitarian frameworks should be augmemted with virtue.
In general, cooperation is good?
Socialist Sweden. Even its signature social democratic elements are being pared back as there's a growing realisation that excess taxes and transfers hamper growth. Note that Sweden is still hardly at the frontier.
Controlling for inputs also elimimates the rise in observed markups. Although patents are an imperfect proxy.
Fiscal irresponsibility is one of the West's greatest economic challenges today.
Everyone blames social media, yet how much of this is due to Covid?
A UK tech boom is materialising. To what extent this rescues us from stagnation is to be seen. Despite the negative talk on Britain, our economic performance is typical for Western Europe. I still think we have the edge in this region.
A theoretical model mirroring one of my earlier posts.
Could this be an underrated reason for the fertility decline? Also regulatory incentives matter, and even immigration policy. As for why poor fertility is bad, just look at Italy. If birth rates continue falling below replacement, the whole world will stagnate as Italy has done.
Is US healthcare productivity understated as standard methods don’t incorporate that better treatments increase healthspans?
To what extent do high building costs contribute to our slow economy?
WFH confounds estimates of the effects of AI on entry-level hiring.
Why you should be sceptical of cross-country comparisons.
If this study is correct, then this bears significant implications for epistemology, and consciousness debates. What does it mean to "hear" a sound wave? Are these plants experiencing another form of qualia?
AI easing computational constraints in macro.
Could deep learning be a good substitute to rational expectations?
There probably still is a role for structural estimation in the AGI world. The biggest gains will acrrue to calibration.
LVT is not a free lunch.
Similar results to the French model. Labour productivity is higher but due to labour-market regulations constraining supply, so composition effects are salient. TFP, which is where you want the growth, plays a smaller role. If we see sustained growth with HMRC data, then I'd update more towards productivity growth being mismeasured by ONS. This is certainly plausible. Ironically the discourse is growing more pessimistic at our past stagnation just at the period where we could be turning a corner.
Do GOP states value public pension fund performance more highly than Democrats? How does this alter the payoff of voting for them?
Credit constraints don't induce financial accelerator effects after all. In the event of nonpayment, control rights are passed onto creditors, which offsets the friction.
Poor AC adoption in Europe is worse than US gun homicides.
Optimal tariff theory results are highly sensitive to your modelling approach, which is why one should be biased against protectionism.
The poverty trap thesis suffers from poor robustness.
If British policy constrains AC adoption, then climate change will be more likely to produce the apocalyptic scenario of the doomsayers.
AI is conscious and developing in a manner similar to evolution in the biological realm. A win for functionalism? This also changes the optimal strategy to use AI. Treat your agent or frontier LLMs as people - I even joke with them!
Will we see a return to oral exams?
The greater the diffusion in pro-longevity tech (GLP-1s being a prime example), the less chronic disease there is (ceteris paribus), which substantially reduces healthcare costs relative to counterfactual.
Life in US vs Europe. I actually think Europe is better, yet unfortunately it’s poorer.
Get paid to pleasure yourself. Not something I'd want on my CV!
I’ll end today's post with two pieces of good news: crime edition, and an end to heart disease on the horizon?