From @stephensemler.bsky.social newsletter. That's why I was never a fan of the ‘vibecession' theory - things got worse for many when many programs like the child tax credit got cut.

You may have seen this chart making the rounds about whether people are less conscientious. But are the really? I took a deeper dive, asking three questions: 1. Why are we looking at this data? 2. Did the authors explain the data? 3. Is the data unexpected?

Research on immigration shows that immigrants bring significant economic value and are in many cases positive for the fiscal health of the government. The three articles below describe this research at length:

Proponents of immigration restrictions believe that these restrictions will lead to higher domestic hiring. Shouldn't we see this falling then?

How to destroy your competitive advantage in one quick swoop:

The interest rate cut did not impact the US government borrowing costs at all. As expected. Personally, I'd be surprised if we see any more cuts this year. I'd put higher probability on a rate hike (unless courts void tariffs, in which case no change to rates).

Economics often has too much jargon and gate keeping. I want to change that - which is why I write my newsletter.

We've been in a tight labor market for 3+ years In a tight labor market, workers have more bargaining power. This has been the paradigm over the past years With a loosening labor market (due to the Republican agenda), firms will see the paradigm has shifted and that they have the bargaining power

A chart that shows ‘native’ job employment up in the US while immigrant job employment is significantly down…maybe false! Why? Well it's based on surveys. What's the main problem with surveys? People don't have an incentive to tell the truth and… actually respond at all.

Hot Take: Companies would be better off developing algorithms that do 80% of a task close to perfectly, rather than incorporating genAI that can do 95% of the task but with 90% accuracy.

We keep seeing sensational headlines like these - but often they are incorrect or meaningless. I wrote a short guide on how to avoid such sensational headlines:

Media loves sensational economic stats headlines. If you want to filter out the noise, ask these 3 questions when reading any data headlines: 1. Why are we looking at this data? 2. Did the authors explain the data? 3. Is the data unexpected?

Every doctor would tell you not to switch the medicine if it is working. But the private health insurer says they no longer cover it, because there is a cheaper, bio-similar alternative. You switch - it no longer works. Switching back also might not work. Who pays for the damages?

We brought down 9% inflation with 4.5% interest rates. Because it took a year, it wasn't 'transitory' inflation. We now have 4% interest rates, and inflation is ticking up to 3% due to tariffs. This inflation is allegedly 'transitory'.

Inflation - transitory or permanent shock. Suppose you have a firm and one of your workers calls in sick and you have to pay your other workers over time. This would increase your costs, but once your worker is back, the shock disappears. 1/3

When discussions about ‘'national security” quickly turn to racism. It starts with NVIDIA chips and naturally progresses to this: www.bbc.com/news/article...

Different reasons have been suggested as to why people weren't happy with the economy under Biden - inflation, mortgage rates, vibes. Whatever you think it is, you need to grapple with the following two charts - real post tax/transfer income fell and many programs were cut.

Many say that the US healthcare system needs to be expensive to justify the research expenditures. The same people often criticize free public healthcare, as being wasteful since patients may do too many tests or procedures.

Huh... The Republican party is really pro-wealth tax. Who would have guessed.

The US will do everything before implementing better taxation.

Will AI lead to a significant productivity increase? I'm skeptical. We've already had several great technologies - like wells and piped water, which did boost productivity but not by that much. I’d be surprised if AI was different.

The US economy unfortunately looks like it is heading towards this outcome (in comparison to an economy with no new tariffs). And this is without taking into the anti-immigration policy.

The US is currently experiencing lower GDP growth, higher unemployment, rising inflation. Unfortunately real wages will follow shortly. The economic policy mix built by Bessent-Lutnick is really firing on all cylinders here.

Yup - survivorship bias in the WSJ article is the main issue of the idea of sacrificing work-life balance Unfortunately, even economists miss this - as I wrote about the experience of the PhD job market and how it's structure is often praised by 'survivors'. www.nominalnews.com/p/survivorsh...

The criticism of the Fed is unjustified. Here’s a chart that shows their work. Absent shelter (which is only rent - a very lagged variable), US inflation of all non-shelter goods/services has been at or below 2% for 2 years. Note the recent uptick…

If a government offers a tax credit or a subsidy to a company, why shouldn't it be given an equity stake? It could be a choice for the firm whether to accept the benefit. Any research/counterarguments to this?

Thought: to get tickets to “Shakespeare in the Park” - a free play in NYC - you have to line up (either at the show or for a lottery). Economists will quickly point out that we're paying with our time, which is a ‘waste’. If tickets were sold, many would benefit, including the theater.

The GDP measure does correlate well with welfare (first image). But it hides a lot of heterogeneity in how well countries convert GDP into welfare (second image). Figuring out what drives this 'conversion' is important. Think of it like TFP for happiness (Source: Jones and Klenow, 2016)

Programs like unemployment insurance, are rarely mentioned as positive-sum (unlike, say trade). But research by Casey McQuillan (@caseymcquillan.bsky.social) and Brendan Moore shows how UI generates value by allowing job-seekers to find better job matches nominalnews.substack.com/p/unemployme...

Update: based on the tariffs that were set at the end of June, here is how key economic variables for the US are expected to behave. Whether other countries retaliate or don’t, the adverse on impact on US workers will be large - a 4% fall in real wages.

I will be using this term - once you see how often outsiders think they can easily solve the problem, you see this approach in every domain.

Right on cue - another billionaire knows what it means to estimate data. He believes this - 159,309,000 to 159,669,000 - is not an accurate enough estimate of the number of jobs in the US.

Doesn't the behavior of the US housing market really vindicate the New Keynesian sticky price assumption?

We had to discuss the firing of the BLS commissioner. The BLS estimates are remarkably precise - the 90% confidence interval is +-136k jobs. That's the same as a 0.1lbs weight range for an average person. www.nominalnews.com/p/trump-bls-...

Rarely do you senators following economic research. Good idea + it needs to be coupled with proper road usage fees (absent the latter, fares might even need to be negative).

From the perspective of the EU, the US just imposed a VAT (this is not VAT from the perspective of the US as it distorts the US labor/capital allocation). Why the concern?

The Federal Reserve's Fed Funds Rate is basically where the Taylor Rule would tell us it should be.

The trade deal with Europe probably has zero impact on Europe. Europe didn't lose anything here - they will export to other markets or increase domestic consumption due to falling prices on these exports.

Jerome Powell has come under significant criticism. Under closer inspection, the Federal Reserve's decisions are fully driven by economics. Full article in the comment below, and if you enjoy my work even a bit, please subscribe (it's completely free!)

Since there may be publication bias towards papers with statistically significant results, is there an argument for having papers be submitted without results? So only the question, data, method, what kind of robustness is being done is shared, but the result (whether significant or not) is hidden.

My next piece (hopefully today/tomorrow) will be on why the Federal Reserve has been correct with its interest rate policy.

Would falling house prices incentivize homeowners to upzone their land (at least apply to do so)?

Meta offering tremendous sums of money for AI researchers really vindicates the Fernández-Villaverde, Yu and Zanetti (2025) paper on researcher hoarding.

This example of Meta offering unreal salaries to AI researchers to hoard them is exactly the case we discussed recently in our newsletter - what may be good for workers, might not be good for the economy.

Currently each year 85,000 H-1Bs are issued to people with a BA degree or higher. The visas are allocated by lottery system, as there are more applicants than visas. My prior is that this solution - salary based selection visa - will be harmful.

Corporations often find every ‘weakness’ in the tax code that leads to the corporation’s benefit. Using that example, we assume that low income individuals are also able to do that on a personal level. I think this is where the idea of significant benefit abuse by people really comes from.

I'm completely bewildered by the takes that the Federal Reserve and Powell have not done a good job. Given the outcomes under the various dramatically changing conditions (covid, support policies expiring, tariffs uncertainty), the Federal Reserve and Powell have done an excellent job.

I mean this is just plain evil- “Florida enacted a law allowing non-competes of up to four years" (previously it was two years) No one wins from non-competes, not even the business that have them. Business leaders don’t understand general equilibrium effects www.businessinsider.com/florida-made...

I don't think Oren understands what he means by relative price change. Firms, on aggregate, set prices by adding a mark-up to real marginal costs. Is he implying firms will reduce mark-ups? I doubt it. So real marginal costs must fall. But that means.....workers will be paid less!