MPLan

The debate around improving safety in cities often revolves around whether this means deploying more police or not. In New York City, the recent mayoral election had certain candidates promise an increase in police patrols, while another candidate proposed the creation of a non-police unit to deal with certain issue (homelessness and mental health).

But do these non-police approaches work? A recent paper by Blattman, Duncan, Lessing and Tobon (2024) (“BDLT”) tackles this issue with a fascinating research design and find somewhat surprising answers!

Louie, Mondragon and Wieland (2025) show that typical supply constraints such as zoning laws cannot explain the observed price differences across cities.

What does? Income.

On October 13, 2025, the Nobel Prize in economics was awarded to Joel Mokyr1 – “for having identified the prerequisites for sustained growth through technological progress” – and Philippe Aghion and Peter Howitt – “for the theory of sustained growth through creative destruction”.

The work by Aghion and Howitt is very timely, as it may help explain some of the rise in genAI investment spending.

The US government has made headlines over the past year by taking an equity stake in Intel Corporation, along with 4 other companies. At the same, the US government has also levied significant tariffs, and continues to issue new debt (the current total debt to GDP is 125%).

So how are all of these topics connected? They’re all a form of tax.

Restricting college-educated immigration appears to:

    Reduce employment of locals;

    Reduce the wages of (most) locals;

    Reduce venture capital investment and IPOing;

    Reduce patenting;

    Increase outsourcing and offshoring.

Many of these effects are compounded when it involves smaller firms.

With the media posting sensational economic stats daily, filtering out the noise becomes crucial.

Should we care about Gross Domestic Product (GDP)? Does GDP reflect what matters? Is GDP a good measure? Recently, an influential tech podcaster and interviewer, Dwarkesh Patel, brought up the topic in the following context:

"As measured by GDP, AI will be super undervalued. How would the datacenter of geniuses show up in GDP? GDP would show raw inputs (aka chip & energy), and raw outputs (aka cost of tokens). But wouldn't clearly reflect the value of the crazy new [stuff] that's being cooked up in those tokens. Similar problem to how the Internet's value is undercounted today (since many products are free, and thus contribute nothing to measured GDP).”

Dwarkesh Patel is both right and wrong. To understand why, we need go over what is the GDP measure, why we measure it, and does it capture what matters to us.

Unemployment insurance, beyond consumption smoothing, allows people looking for jobs to find better job matches, which in turn increases earnings by $15,000 in the two years after UI receipt. The cost of UI, in comparison, is only $4,000.

Immediately after the publication of the July jobs report, President Trump fired BLS Commissioner Erika McEntarfer, accusing her office of “manipulating” data for political ends. What really happened?

Jerome Powell has come under significant criticism. Under closer inspection, the Federal Reserve's decisions are fully driven by economics.

Work requirements are often touted as a remedy to prevent the misuse of benefits. Instead, they only end up harming those who are most in need.

By looking at a natural experiment, researchers were able to find that work requirements end up pushing the most vulnerable people of the programs.

The debate around free-buses and transit has been often framed as a question of whether a person would prefer cheaper transit or more transit.

This framing is not actually economic - how much of a service we provide and how we fund it are two different questions. This pertains to all government services (parks, parking, healthcare etc). Fares (and lack of fares) cause externalities and those should be discussed. That's what recent economic research on Chicago showed - an optimal transport policy would set fares close to zero.

Public predictions about the impact of genAI on workers and the economy are dramatic – but are they right?

Depending on our assumptions on the effectiveness of AI, economic models often suggest outcomes differing from what we see in the public sphere. For example, employment may rise in AI impacted jobs if the level expertise needed for the non-automatable parts of the job is not high.

The price increases from tariffs can be seen in both economy-wide data and retail data. Core goods inflation in the PCE reading is already 0.33 percentage points higher due to tariffs, increasing overall inflation by 0.1 percentage points.

So far, we've only seen half of the tariff pass-through.

A recent paper looks at an economic puzzle - innovation has been declining, but the number of researchers has gone up along with wage premiums.

A more concentrated market for researchers can partially explain these patterns.

On May 16, 2025, Moody’s downgraded the rating of US debt from AAA (Aaa) to AA+ (Aa1). What does this mean and what does economics have to tell us about it.

Fenizia and Kirchmaier (2025) (“FK”) studied the impacts of working from home by public sector employees. Workers assigned to work from home end up recording about 9%-10% more cases compared to workers in the office.

To read more details on this study: https://www.nominalnews.com/p/wfh-hybrid-productivity

Clemens, Lewis and Postel (2018) (“CLP”) looked at the impacts of the termination of the Bracero Agreement. The original reasoning for cancelling the Bracero Agreement was to improve wages of US citizens in the agriculture sector, especially in states that had a high number of immigrants from Mexico under the Bracero Agreement. CLP found that there was no change in real wages for citizens after the agreement was terminated. Moreover, there was also no change on employment.

For additional information on this paper and other papers regarding non-college educated immigration, see here - https://www.nominalnews.com/p/h-2b-immigrants-economic-growt...

A firm that goes from having about half of their H-1B applications succeeding to winning all of their H-1B applications (firms on average apply for 2.5 H-1B visas in a given year):

- sees a 4.5 percentage point (10% more likely) increase in getting venture capital funding;

- sees a 1.5 percentage point (20% more likely) increase in going public (IPOing on the stock market);

- sees the number of patents increase by 4.8%.

More details at - https://www.nominalnews.com/p/h-1bs-immigrants-with-degrees-...

College-educated immigration is often considered to reduce local job-hiring and push down wages. It appears, however, that an additional H-1B lottery win increases both immigrant and local employment. Moreover, immigration reduces offshoring, increases patenting and increases venture capital investments.

To read more: https://www.nominalnews.com/p/h-1bs-immigrants-with-degrees-... ("H-1Bs – Immigrants with Degrees Spur Economic Growth")

In 2018, the US Supreme Court abolished the federal sports betting ban. Many states legalized sports betting soon after. So what has been the impact of sports betting legalization on household finances - did it impact saving or did it shift consumption around.

The authors find that: 1.The legalization of sports betting has led to a reduction in net investment, with a $1 increase in sports betting reducing net investment by $0.99. This effect is more pronounced for low-saving households, where a $1 increase in sports betting reduces net investment by $3 ((this additional drop in savings can be driven by the fact that bettors increase other entertainment expenditures such as watching the games).

2. This increased amount is usually funded at the expense of 'traditional brokerages'

3.The legalization of sports betting has also increased participation in lotteries, but not in online poker, suggesting that not all gambling activities are treated the same.

Interestingly, the introduction of Prize-Linked Savings Accounts could mitigate some of the increase in sports betting, as it has reduced the use of casinos.

To read more on this paper and others on the topic of gambling and investment - https://www.nominalnews.com/p/sports-betting-investments-cos...

Common leadership, via the sharing of board members, significantly increased the likelihood that tech firms would not hire each others' workers. This form of 'no-poaching' may have had much bigger impacts on wage suppression:

"It is worth noting that such collusion against workers may have costs beyond just the directly impacted workers in the high-tech sector. Wages and salaries of jobs in one industry can serve as reference points when workers in other firms/industries negotiate their wages. Thus, if high-tech workers get paid less, this may impact wages of other workers, say in finance, which may then impact wages in another sector and so on. Collusion in one sector can have impacts on other industries."

To read more: https://www.nominalnews.com/p/competition-no-poaching-real-p...

This is a good question that we don't have the answer to yet.

Generally, other research has found that the college wage premium grows with age (i.e. a 50 year old with college vs a 50 year old without college degree makes even more in relative term). Thus, if the initial wage premium is driven by the coursework/upskilling due to classes, then we could see the negative impact of less coursework be even stronger in the future.

<- In fact this is what we really want to measure isn't it? Not are you ready for your first job out of college, but did you gain skill that make you a better all around worker.

I think that is what the result may be showing. Even if coursework might not have direct applications, it trains/teaches you in other ways that are applicable to many other scenarios.

Do the extra years of schooling at college increase people’s skills or is college just an expensive signal? The study by Arteaga (2018) suggests it’s the former.

After reducing the required coursework at a university, wages of graduates fell by approximately 15%. Here is the link to the write-up of this article - https://www.nominalnews.com/p/higher-education-is-it-worth-i...

Using entry of Starbucks cafes into neighborhoods, researches found that the creation of third places leads to increased business formation. Overview of the paper and the methods here - https://www.nominalnews.com/p/coffee-entrepreneurship-innova...

Bossler, Chittka and Schank found that after the second minimum wage increase (from EUR to 10.45 to EUR 12.00), average wages of the people who were earning less than EUR 12 went up by 6%. Moreover, there was no noticeable reduction in employment. There was however a slight reduction in hours worked – impacted individuals worked 1% fewer hours, meaning their overall monthly wages went up only by 5% on average. Thus, it appears that a significant minimum wage change had a net positive impact on workers with minimal downsides. (https://www.nominalnews.com/p/minimum-wages-employment-benef...)