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The economics of H-1B immigration
We study the effects of H-1B immigration on U.S. industries that employ H-1B workers and their trading partners. Using a novel cross-industry design and the 1999–2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity ...
How does the market regard stablecoins?
We study the demand for safety and liquidity in the crypto ecosystem. We do so under a framework in which a representative investor allocates liquidity across stablecoin deposits in lending pools and traditional safe assets (e.g., MMF shares). Our model delivers three main predictions: (i) the stablecoin deposit premium co-moves with the Treasury premium when investors value the safety and liquidity services of stablecoins; (ii) increases in Treasury supply reduce the stablecoin deposit premium;...
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UK Fuel Price Intelligence – Market analytics from reporting stations
Live UK fuel price averages, motorway premium, supermarket discount and brand comparisons from the Fuel Finder scheme.
The iPhone explains 33–52% of fertility decline among women aged 15–44
Founded in 1920, the NBER is a private, non-profit, non-partisan organization dedicated to conducting economic research and to disseminating research findings among academics, public policy makers, and business professionals.
Reforms to the PhD?
The Trump administration is pairing top universities with corporate giants in an effort to steer traditional PhD programs toward national scientific priorities. Today, the White House and National Science Foundation are announcing a $47 million pilot program to fund around 250 four-year doctorates in technical fields, starting this fall. Students in the pilot will be placed at an industry partner, where they will spend at least one year doing “practical research” that can go towards their disser...
Data on Chinese innovation
China’s technological progress in recent decades has been viewed with admiration, alarm, and (in some cases) doubt. To better understand the Chinese innovation ecosystem, we compile a dataset of almost 14 million domestic Chinese patent publications. We focus on the subset of critical technologies identified by the U.S. Department of Defense. Several surprising patterns emerge from the data: Chinese patenting is strongly associated with other measures of innovative progress; patents are not conc...
The Decline in the Transmission of Scientific Ideas
We document that the diffusion of new scientific ideas beyond their field of origin has declined substantially over the past four decades. This contraction is closely linked to increasing specialization in scientific language: research that employs more technical terminology tends to be adopted less broadly. We develop a theory of scientific discovery in which the diffusion of new ideas depends on the degree to which potential adopters can understand and process them. When introducing their disc...
Alec Stapp on the new Science report from Michael Kratsios
Major new report from the White House Office of Science and Technology Policy. Five things in the report I really liked: 1. Proposes metascience units as a way to advance experimentation in science agencies. IFP recommended OSTP take this forward in our response to a 2025 RFI. 2. Advocates for a portfolio approach to federal science funding. Right now, basic research funding largely goes to incremental, project-based grants. While important, they can’t be the only mechanism we use to fund scienc...
The economic effects of GLP-1s
We estimate the causal impacts of GLP-1 treatment on labor market outcomes using linked Danish administrative data and a matched stacked difference-in-differences design. We compare patients who initiate GLP-1 treatment during the first two years of Semaglutide availability to observably similar patients who initiate four years later. We find that GLP-1 treatment reduces long-term sickness leave by 17.3%. We estimate total fiscal benefits of GLP-1 initiation of approximately 1.3–1.5% of annual l...
Governing agentic AI
From a new paper by Shruti Rajagopalan: AI agents now transact, publish, and act on external systems without contemporaneous human approval, creating new regulatory challenges. A growing literature has responded with proposals for legal personhood. This Article argues that personhood is neither necessary nor sufficient, shifting the question from status to enforcement. The Article first shows that for two millennia, nonhuman legal personality, from the Roman universitas to the corporation, the H...
Progress against dementia
Mr Stallard has been working for a decade to corroborate this revelation. His findings have, if anything, become even more striking. Last year he and some colleagues published research in the Journal of the American Medical Association showing that, whereas 40 years ago three in every ten Americans aged 85-89 had dementia, by 2024 just one in ten had it (see chart 1). What is more, America is not the only beneficiary of this trend. Between 1988 and 2015 the share of older people being diagnosed ...
That was then, this is now
One of the cool things about European football is that it provides good evidence that high-income, high-ability individuals move in response to tax rates… That is from Jeremy Horpendahl, citing research by…Emanuel Saez. The post That was then, this is now appeared first on Marginal REVOLUTION.
Do falling birth rates boost per capita income?
The secular decline in birth rates across the globe over the past seven decades has slowed population growth, raised average ages, and reshaped labor markets and the macroeconomy. Contrary to the widespread expectation that these trends hamper economic growth, we find lower birth rates are associated with higher growth in GDP per working-age adult across countries and higher wage growth across US commuting zones, with no negative impact on aggregate GDP or earnings. These patterns are not explai...
Prediction markets paragraphs to ponder
The oracle is an elaborate Web 3.0 contraption that combines cryptocurrency, voting and game theory in its goal to produce fair judgments. It’s billed by its creators, a company based in Manhattan called Risk Labs, as a “decentralized truth machine.” But for all its brainiac complexity, the oracle has proved exploitable. Dozens of livid bettors claim the system has been gamed, the handiwork of a budding tech entrepreneur named Lancelot Chardonnet (his name at birth, he says). A look at the Donk ...
Will future biomedical advances be low marginal cost?
Most pharmaceuticals involve high upfront costs, to discover and test the drug, and very low marginal costs. Another pill can be printed almost for free. That cost structure favors health systems, such as that of Britain, that try to pay lower for services. They can end up getting a relatively good deal from price discrimination. After all, they can be served at low marginal cost, at least for those ttreatments. Now imagine a biomedical future where many more treatments are based on the sequenci...
Does fasting harm cognitive performance?
More than 2 billion people participate annually in Ramadan fasting, making its potential effects on cognitive performance important for workplaces, education and high-stakes decision-making. We study these effects in tournament chess, an incentivised, real-world cognitive task in which move quality can be evaluated objectively by a strong chess engine. We analyse nearly 300,000 games and more than 25 million moves played by almost 10,000 expert players from 178 countries over 10 years. Two valid...
Elderly Health and Longevity in the US
Rising elderly life expectancy is a well-known source of fiscal pressure on Social Security and Medicare – but how have declining mortality and morbidity affected the two programs’ relative finances? Using nearly three decades of Medicare Current Beneficiary Survey data (1992-2019), we estimate that these demographic changes raised expected lifetime Social Security spending by over twice as much as expected lifetime Medicare spending: 14% compared to 6%. The slower growth of elderly lifetime hea...
Two Roads to Fast Clinical Trials, and the US Takes Neither
The HHS (FDA, NIH, ARPA-H and related agencies) is moving to speed clinical trials in what they are calling Operation TrialBlazer (kudos on the pun). The motivator, of course, is China: China has made biotechnology a strategic national priority, systematically expanding its clinical research infrastructure with government backing, streamlined regulatory pathways, and sustained investment. In 2021, China’s global share of Phase 1 trials surpassed the United States’ share for the first time, a mil...
A Cohort Perspective on Latin America’s Fertility Transition
Latin America’s momentous fertility transition is now in the domain of history, allowing a cohort perspective on the decline of completed fertility. Using census microdata from 17 Latin American countries, we track female birth cohorts from the 1920s to the 1970s by subnational region to document the extent to which cohort fertility decline coincided with other demographic and socioeconomic processes. Across cohorts within subnational regions, children ever born fell one-for-one with mortality d...
AI-Native Firms
Very important work from Hyunjin Kim and Rembrand Koning. Insead and HBS respectively: We study how firms built around AI capabilities-“AI-native” firms-are organized. Drawing on Y Combinator batches W20-F24 and U.S. venture-backed startups whose first financing closed between 2020 and 2024, we classify each firm’s AI-native status and link it to workforce microdata on team size, function, seniority, and hierarchy. Relative to non-AI startups in the same industry-cohort, AI-native firms are 25% ...
The Shingles Vaccine Reduces Dementia
In 2023 in Can the Shingles Vaccine Prevent Dementia? I wrote: A new paper provides good evidence that the shingles vaccine can prevent dementia, which strongly suggests that some forms of dementia are caused by the varicella zoster virus (VZV), the virus that on initial infection causes chickenpox. We now have three more studies–from America, Australia and Canada–that find similar results using large numbers and credible research designs. Thus, I think we can up this to the Shingles vaccine red...
Who Leads? Relative Age Effects on Social Capital
A fascinating paper and result: This paper studies the causal effect of being the oldest within a school cohort on social capital. Using a fuzzy regression discontinuity design and data from Facebook, we find that boys who are older than their classmates make 11% more friends in high school. This social advantage is associated with leadership roles, with relatively older boys 42% more likely to become class president than their relatively younger peers. Men who were relatively older during child...
Montana’s SB535 and a Potential Biotech Renaissance in America
In 2024, China’s NMPA approved 83 new drugs, the FDA approved 50. China’s share of new commercial clinical trials jumped from 8% globally in 2013 to 30% in 2024, just behind the US at 35%. Last year, China-based Jiangsu Hengrui Pharmaceuticals overtook AstraZeneca as the top clinical trial sponsor in the world. What’s remarkable is how China is winning: deregulation and capitalism. It’s faster and easier to set up a clinical trial in China than in the United States. China is even experimenting w...
What do the AIs think of us?
Asked to answer as a typical human, every cutting-edge model rated us markedly more neurotic, less open, less agreeable and less conscientious than they rated themselves. The gap on Neuroticism alone is 1.69 points on a 5-point scale. Here is more material of interest. And this: Across 31 models from those seven labs they answer the personality tests in unison: high openness, low Dark Triad, Universalism on top, Power dead last in every single model. The post What do the AIs think of us? appeare...
How High-Skill Immigration Restrictions Eroded Regional Productivity: Evidence from the 2017 BAHA Executive Order
This paper estimates the regional economic impact of high-skill immigration restrictions by analyzing the 2017 “Buy American, Hire American” (BAHA) policy as a quasi-experimental policy shock. By significantly tightening H-1B visa adjudication, BAHA caused new employment petition denial rates to double from 7% to 17%, while STEM-specific rejections tripled to 31%. Using a difference-indifferences framework, this study finds that states highly dependent on H-1B talent experienced a statistically ...
New paper on the iPhone and fertility
The U.S. general fertility rate has fallen by 22% since 2007, a sustained decline not readily explained by economic conditions, contraceptive use, housing or childcare costs, or other commonly cited factors. We assess the potential role of a different shock: the diffusion of the smartphone. The U.S. rollout of the iPhone, the first modern smartphone, provides a natural experiment: from June 2007 through February 2011, the device was sold only on AT&T, allowing us to identify its effect from vari...
How well does current AI find errors in economics papers?
Can artificial intelligence (AI) refute economic theory? I document experiments in which I asked several AI models (Gemini, Refine, Claude, and ChatGPT) to check the correctness of four published papers in economic theory, each containing an error that I helped identify or correct. ChatGPT Pro performed best, occasionally constructing counterexamples and corrected proofs, while other models fared worse. However, no model located a true error without substantial human guidance, and data contamina...
A Beautiful Theory Falls to Ugly Data
My latest paper, A Test of the Coase Conjecture Using Prices of Electronic Books, with the excellent Tim Groseclose, has just been published. The Coase Conjecture is another one of Coase’s little ideas — the original paper is six pages — that has spawned hundreds of follow-up papers and thousands of citations. The idea is simple. A monopolist of a durable good has a time-inconsistency problem. Set the monopoly price in period 1 and he will be tempted in period 2 to cut the price and mop up the c...
AI in gdp
Quality-adjusted AI production in the United States grew at over 2,000 percent per year in 2024 and 2025, driven by three compounding forces: expanding data-center capacity, hardware efficiency gains, and—the largest of the three—algorithmic progress. Treating the AI sector as a coherent economic entity yields preliminary estimates of nominal AI GDP at approximately $250 billion in 2025, growing at roughly 2,600 percent per year in quality-adjusted real terms. National economic statistics accoun...
Revealing Life Preferences Through LLMs
Here is some Weberian verstehen (or is it?), but from unexpected quarters: Large Language Models (LLMs) are trained on a prodigious corpus of human writing and may reveal human preferences over characteristics of life courses, such as income, longevity, and working conditions. We present OpenAI’s GPT-5.4 and a broadly representative sample of Americans with pairs of life stories and ask them to choose the life they would prefer for themselves. A person’s choice is better predicted by the LLM’s c...
Dwarkesh in the Datacenter
Dwarkesh tours one of Jane Street’s datacenters. It’s extraordinary how much compute goes into finance. (I once predicted that the finance AIs would be the first to become conscious, since they have the most compute.) More generally, however, this is a peek inside the remarkable economics, technology and physics of a datacenter. Did you know the electrical signal in a copper wire can travel faster than light in fiber…and that matters! Amazing. The post Dwarkesh in the Datacenter appeared first o...
Robin (it’s happening)
Scientific discovery is driven by the iterative process of observation, hypothesis generation, experimentation, and data analysis. Despite recent advancements in applying artificial intelligence to biology, no system has yet automated all these stages [1, 2, 3]. Here, we introduce Robin, the first multi-agent system capable of fully automating both hypothesis generation and data analysis for experimental biology. By integrating literature search agents with data analysis agents, Robin can genera...
Using agents to build economic datasets
Constructing datasets from primary sources is one of the costliest tasks in empirical economics. We propose Deep Research on a Loop (DRIL), a methodology that uses AI agents to assemble datasets from publicly available sources. DRIL applies a fixed research instrument across a mapped unit space (e.g., countries by years), with a two-stage architecture separating design from implementation. The instrument specifies variables and coding rules, an evidence policy governs sources and citations, and ...
Meta-papers in science (from my email)
From Brennan Plaetzer: Hi Tyler, Your post yesterday argued AI will replace papers with meta-papers that synthesize, re-run, and extend prior work. I built one in oncology last month, before reading your post. I ran my friend Omar Abdel-Wahab’s (MSK) last ten papers through an AI synthesis layer. This came out on top: an integrated, falsifiable hypothesis bridging two of his 2025 papers, one in Cancer Cell on a refractory MEK1 mutation, one in Cell on splicing-derived neoantigens. It comes with ...
Self-fulfilling misalignment?
From Anthropic: We started by investigating why Claude chose to blackmail. We believe the original source of the behavior was internet text that portrays AI as evil and interested in self-preservation. And here is Alex Turner on the topic of self-fulfilling misalignment. I raised this possibility some while ago in a Free Press column, and mainly was met with hostility. The social return to a positive world view, and avoiding negative emotional contagion, never has been higher. The post Self-fulf...
Which are the most common everyday phenomena that we don’t properly understand?
Off the top of my head: • Lightning (how does it happen?) • Sleep; dreams (why do they exist?) • Glass (thermodynamics of formation) • Turbulence (when does it start?) • Morphogenesis (how does a creature know what should go where?) • Rain (it seems to start faster than models would predict) • Ice (dynamics of slipperiness) • Static electricity (which material will donate electrons?) • General anaesthetic. (And the mechanism of a lot of drugs, e.g. paracetamol.) That is from Patrick Collison. It...
Will AI kill the research paper?
Imagine taking a macroeconomics paper and adding a little button at the end “Press this button to update this paper with the latest macro data.” All of a sudden you have multiple papers rather than one, and no single canonical version. It is the latter versions, not created directly by the authors, that people will look at. Imagine adding another button, to either micro or macro papers “Please rerun these results using what the AI thinks might be five other different yet still plausible specific...
USA sectoral shift fact of the day
Healthcare and Social Assistance have added nearly 1.8 million private-sector jobs in the US since the end of 2023 while all of other industries combined have lost 127,800 jobs. Here is the source (Charlie Bilello) and a graph. In relative terms, is this good or bad for men? The post USA sectoral shift fact of the day appeared first on Marginal REVOLUTION.
The interstate trade effects of autonomous trucks
Recent advances in autonomous and semi-autonomous vehicle technologies promise substantial cost savings for goods shipped by truck. In this study, we quantify the impacts of these transport cost reductions on the US interstate trade using a structural gravity model of domestic trade. Based on projected cost savings from the widespread adoption of self-driving technologies, we estimate significant increases in total interstate trade value. State-level impacts vary from 40.3% of GDP in Mississippi...
Do Market Reforms Cause Growth?
Do market-oriented reforms cause economic growth? This paper revisits this question using a cross-country panel of reform episodes identified from various changes in well-known economic freedom and structural reform indices. We exploit the timing of reforms using distributed-lag and event-study frameworks that trace the dynamic response of per-capita GDP. We find little evidence of immediate growth gains and some short-run adjustment costs following reform. However, growth rises gradually and pe...
Borderlands Mexico: Nearshoring fuels 800K-square-foot industrial build in El Paso
Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week in Borderlands Mexico: Nearshoring fuels 800K-square-foot industrial build in El Paso; Hutchison Ports adds electric cranes at Port of Manzanillo; and Burlington breaks ground on distribution center near Phoenix. Nearshoring fuels 800K-square-foot industrial build in El Paso A Dallas-based developer has broken ground on a major cross-border industrial project in ...
Less-than-truckload rates have sharp response to broader market turn
Chart of the Week: LTL Monthly Cost per Hundredweight, Van Contract Rate Per Mile Initial Report – USA SONAR: LTL.USA, VCRPM1.USA After a fairly sluggish start to the year, less-than-truckload (LTL) rates are now showing the highest levels of upward pressure since the exit of Yellow in the summer of 2023. The LTL monthly cost per hundredweight index measures pricing change momentum in the LTL market. This index tracks directional changes in the LTL pricing environment based on transactional data...
Port Houston lands $48M federal grant for Bayport expansion
Port Houston has secured a $48 million federal grant to expand and modernize its Bayport Container Terminal, a move aimed at boosting capacity, easing truck congestion and strengthening supply chain resilience along the Gulf Coast. The funding, awarded through the U.S. Maritime Administration’s Port Infrastructure Development Program, will support construction of a new container yard and a new exit gate at Bayport. Port Houston will also contribute roughly $56 million in matching funds for the p...
Traffix expects double-digit rate increases to hold through 2026
The North American freight market has officially turned the corner. After more than three years of subdued rates following the COVID-era boom, carriers have exited the market in droves, regulatory headwinds have further crimped capacity, and freight volumes are once again climbing. The result, according to Traffix’s newly released Q2 2026 Market Update, is a rapidly tightening environment where spot and contract rates are surging and shippers are being forced to rethink budgets that were built f...
SONAR Sitrep: US industrials, freight unexpected winners in Iran war
Contrary to consensus expectations, the ongoing conflict in Iran isn’t just a geopolitical risk – it is actively widening the U.S. industrial cost advantage. While global competitors in Europe and Asia are grappling with surging gas prices and heavy war-risk premiums, the United States is emerging as a structural winner in heavy manufacturing. The catalyst? The unique mechanics of “associated gas” – natural gas produced as a byproduct of oil drilling. As elevated global crude oil (WTI) prices in...
Make it make sense: Low demand, rising rates on the trans-Pacific
The stalemate in the Iran war has been anything but for ocean container spot rates on the trans-Pacific. While there has been little diplomatic progress between Washington and Tehran toward ending the conflict, the ongoing blockade of the Strait of Hormuz by United States forces has been fueling (pun intended) higher ocean prices during a traditional lull prior to the start of the peak shipping season. Asia-U.S. West Coast spot rates increased 1% to $2,675 per forty foot equivalent unit (FEU), a...
No, America is not in a "stealth manufacturing boom"
Photo by John Morgan via Wikimedia CommonsGreg Ip of the WSJ is one of my favorite economics writers, and you should always read what he writes. But in a recent post about manufacturing, I think he gets the main narrative wrong. Greg writes that America is in the middle of a “manufacturing revival”, which his headline writer calls a “stealth manufacturing boom”:You won’t hear this from either critics or fans of President Trump’s tariffs, but there’s a manufacturing revival going on…Critics have ...
The Robots Make the Predictions
Polymarket bots, OBDC II tenders, Rivian CEO pay, Claude capital allocation, World Liberty and Boardy.
Traders Do Something About the Weather
Also hedge-fund reneging, Polymarket vs. Kalshi and Onion Futures Act protests.