What we’re reading (3/13)
“Fourth-Quarter GDP Revised Down To Just 0.7% Growth; January Core Inflation Was 3.1%” (CNBC). “The first revision of the GDP reading was a sharp step down from the previous estimate of 1.4% and well below the Dow Jones consensus forecast for 1.5%. It also marked a considerable slowdown from the 4.4% gain in the prior period, hampered by a record-long government shutdown that saw government spending tumble 16.7%.”
“Judge Throws Out Subpoenas In Federal Reserve Criminal Probe” (Yahoo! Finance). “A federal judge on Friday threw out two subpoenas the Justice Department issued to the Federal Reserve, all but branding the criminal probe invalid and handing a significant victory to the Fed and its embattled Chair Jerome Powell.”
“The Hottest New Crypto Trade Is 24/7 Oil Futures” (Wall Street Journal). “While traditional energy investors spent the past weekend counting down the minutes until futures markets reopened on Sunday, overseas crypto traders were already placing their bets on the direction of oil prices. The cryptocurrency exchange Hyperliquid lists perpetual futures, a highly speculative flavor of derivatives, tracking West Texas Intermediate crude—the U.S. benchmark—and other commodities. And like other crypto-native contracts, perpetual futures trade 24/7.”
“The Trouble With State Capitalism” (Foreign Affairs). “[T]he more governments today deploy such tactics, the more difficult it will be for their successors to shelve the new playbook. This is not just a change in intensity but also a change in kind.”
“The Labor Market Consequences Of Rapid Sectoral Shifts” (John R. Grigsby and Nathan Zorzi). “Sectoral shifts require costly labor reallocation for workers, fueling concerns about how quickly they occur. We study how the pace of such sectoral shifts affects workers at risk of displacement. We develop a life-cycle model with skill heterogeneity and job ladders where labor demand gradually rises in one sector and declines in another. The model reveals three novel insights. First, workers’ lifetime earnings are strongly non-linear and even nonmonotonic in the horizon over which the transition unfolds. Second, more and more workers benefit on the extensive margin as the transition accelerates, but the tail of losses becomes thicker on the intensive margin. Third, labor market frictions are important to quantify these non-linearities. We apply our model to the climate transition and find substantial earnings losses from a transition ending in 2060. Completing the transition ten years earlier reduces average losses, but raises losses in the tail by a fifth.”
