Is GDP Failing to Capture AI?
A new policy brief from Anton Korinek and Patrick McKelvey estimates annual AI computing spend at roughly $250 billion, a figure that is fully captured in GDP. Yet AI hardware efficiency has driven compute capacity up more than 200% per year, while algorithmic improvements have slashed the compute needed for a given capability by about two‑thirds annually, resulting in a quality‑adjusted output surge of over 2000% each year. The authors argue that traditional GDP accounting, even with hedonic adjustments, may understate AI’s true economic contribution because price declines mask rapid capability gains. They call for refined metrics that better reflect AI’s value to users.
Simone Weil on Education and Attention
Simone Weil’s 1951 essay distinguishes true, receptive attention from muscular, forced effort, arguing that brief, undistracted focus yields deeper learning. The piece links this philosophy to today’s attention economy, where platforms monetize fragmented, shallow engagement. It identifies three attention forms—immersive...
Lessons for Central Banks: Interview with Kristin Forbes
In a recent interview, MIT professor and former Bank of England MPC member Kristin Forbes stresses that economic shocks now unfold within hours, making advanced scenario planning essential for central banks. She argues that routine, apolitical wargaming should become "business...
How Medicare and Medicaid Rely on Private Health Insurance
The latest Journal of Economic Perspectives articles detail how the majority of Medicare and Medicaid beneficiaries receive care through private insurers. About 57% of Medicare enrollees are in Medicare Advantage, where the government contracts with private plans that often receive...
A Foretaste of Warsh as Chair of the Federal Reserve
Kevin Warsh was confirmed by the Senate and sworn in as the new Federal Reserve chair, succeeding Jerome Powell. Warsh argues that inflation is largely a policy choice driven by central‑bank actions and fiscal spending, not external shocks. He criticizes...
How Is AI Affecting the Quantity and Quality of New Books?
A new NBER working paper analyzes Amazon data and finds that the number of new book titles surged, nearly tripling between 2022 and late 2025, as large‑language models (LLMs) spread. AI‑detected content jumped from virtually none in 2022 to over...
Is China Blocking Developing Economies?
A new Peterson Institute working paper argues that China’s dominance in low‑skill manufacturing is blocking a critical early stage of economic development for low‑ and middle‑income countries. By occupying a large share of export markets for textiles and other low‑paid...
Snapshots of Global Defense Spending
The Stockholm International Peace Research Institute (SIPRI) released its 2025 defense‑spending dataset, showing global military outlays have risen about 120% since the mid‑1990s—well below the 180% growth of world GDP. The United States still commands roughly one‑third of total spending,...
The World’s Most Populous City Builds Mass Transit
Jakarta, now the world’s most populous city, has rapidly expanded its mass‑transit network over the past decade. The city’s bus rapid‑transit (BRT) system now reaches roughly 90% of residents, and electrified commuter rail, subway, and light‑rail lines link suburbs to...
History of the Disposable Diaper
Disposable diapers went from a niche 1% market in 1957 to dominating U.S. households within two decades. Procter & Gamble’s Victor Mills led a secretive R&D effort that produced a successful prototype in 1959 and, after solving a complex high‑speed...
How AI Boosts International Trade
U.S. imports of AI‑related products have surged, growing 73% year‑over‑year through January 2026 while overall imports rose only 3%. The Minneapolis Fed’s new classification shows AI goods now account for 23% of all U.S. imports, up from 15% in 2023, with...
Global Trade Imbalances: Actual Problems, Unlikely Solutions
The IMF reports that global current‑account imbalances have risen from about 2‑3 % of world GDP in the 1970s‑90s to over 4 % after 2000, driven largely by China’s WTO accession and a widening U.S. trade deficit. The United States finances AI‑related...
World War Trade
Richard Baldwin’s new online book, *World War Trade*, chronicles a year of President Trump’s aggressive tariff regime and its fallout. The analysis shows that tariffs intended to boost U.S. manufacturing instead raised consumer prices and strained global supply chains. Baldwin...
Declining Survey Response and Government Data
Survey participation in key federal household and business questionnaires has plummeted, with the Current Population Survey dropping from nearly 90 % a decade ago to about 60 % today. Similar declines affect business surveys such as the Current Employment Statistics and CPI‑C&S,...
Industrial Policy: A Policy Menu
The World Bank’s April 2026 report by Fernandes and Reed presents a menu of fifteen industrial‑policy tools, split into first‑rank and second‑rank options, and outlines a four‑step decision sequence for governments. It stresses that strong, insulated institutions and basic economic fundamentals...