Nicolas Treich

Le problème des retraites et du conflit intergénérationnel, c'est peut-être @montebourg qui en parle le mieux sur @Thinker_View

Snippet from final exam for Gary Becker's class in 1988 this is what people mean when they say that Chicago Price Theory is very different from standard microeconomics

Henri Weber nous parle de l’économie politique de la queue en Pologne (1981). C’est cadeau

I have embarked, with Beatrice Weder di Mauro, Pascal Lamy, and Enrico Letta on a major project, called Europe 2050. The idea is to think about what we want Europe to be in 2050, look at where it is today, and how we can go from here to there. (Thanks to Mr Putin and Trump for forcing us to think about the role of Europe, and hopefully, for Europe to do what needs to be done). To achieve this, we have invited a number of experts, be it on trade, on defense, on regulation, on European institutions, on populism, etc, to write short notes, which we shall put on the web as they come during the spring and the summer. Some contributions are likely to be more vision-like, others to be more narrowly focused and technical. (We shall write a stock taking paper at the end). I do not expect the project to come out with a generally agreed plan, but more to serve as a toolbox for what needs to be done. shorturl.at/Wr2QO I intend to tweet about each contribution, starting with the first two. Comments welcome.

We stopped everything to write an answer (link below) to Paul Krugman's two posts of today (one informal, one with a simple model) arguing that Europe is broadly not falling behind the United States. The change measured by the Draghi report, he argues, is mostly due to growth in the technology industry, which has distorted GDP numbers without actually leading to higher standards of living. We should believe our eyes when we walk around France and walk around Mississippi. Krugman is wrong. The measures he uses understate European stagnation. This matters enormously. Divergence with the United States is the strongest evidence for reform in Europe. 1. The growth numbers Krugman compares the United States, France, and Germany at purchasing power parity in current prices. On that measure, France's and Germany's position relative to America has been roughly constant since 2000. But current price comparisons miss productivity gains in sectors where prices fall. If America produces twice as much software while the price of each unit halves, the value of American software output looks unchanged even though the volume has doubled. Most economists therefore use constant prices, which fix the base-year PPP level and apply each country's real output growth on top of it. American output growth has concentrated in tech, where prices have fallen tremendously as productivity rises. In terms of the volume of things produced, America has pulled away from Europe. 2. Is it all the tech industry? Krugman concedes this tech divergence but says it is not welfare-relevant. The American growth lead is an accounting artefact of measuring more iPhones at base-year prices, not a sign that Americans are actually richer, because Europeans buy the same iPhones at the same world prices. This is not the right way to think about the world today, as an earlier Paul Krugman would have argued. His model assumes tradable goods, interchangeable workers, marginal-cost pricing, and no profits. Each assumption fails. Most of what households buy is non-tradable: housing, healthcare, childcare, education. When American tech firms bid workers from haircutting to coding, American haircut wages rise. Germany has no growing tech sector to do the bidding, so German wages stay flat. Technology is not priced at marginal cost. Apple's margins are around 40 percent. Anthropic's inference margins are at 70 percent. The major platforms enjoy network effects, switching costs, and lock-in that hold prices well above what a competitive market would deliver. A large share of the productivity gains in technology stays as profit. A lot of the value of American technology dominance shows up in equity, not in wages. Apple, Microsoft, Nvidia, Alphabet, Meta, and Amazon together are worth $21 trillion, more than the entire combined stock market value of all European stock markets. Around 60 percent of US equity is held by American households. The median French or Spanish household holds almost no equity. The median employee at Meta, a company with almost 80,000 employees, earned $388,000 in 2025. This advantage is not going to go away. Krugman's own 1991 paper, cited in his Nobel prize, showed that comparative advantage in modern industries is produced by increasing returns to scale, specialized labor markets, supplier networks and the agglomeration of suppliers, workers, and ideas in particular places. Once an industry concentrates somewhere, the concentration is self-reinforcing. Europe is being pushed away from the next round of technology industries (AI!). 3. What about inequality? Another retort is that GDP per capita hides substantial inequality, and so even if America is rich on average, this is mostly due to the super wealthy. But despite the US's high pre-tax income inequality, it also achieves higher median incomes than Europe, in part because of such a high base, and in part because it actually redistributes more than many European countries. The cleanest comparison is median equivalised disposable household income: income after cash taxes and transfers, adjusted for household size and purchasing power. According to the OECD's 2021 numbers, the median American earns 30 percent more than the median Dutchman, about 31 percent more than the median German, and about 52 percent more than the median Frenchman. 4. What about hours worked? Krugman points out that while American GDP per person is higher, most of this is because Americans work more. For this divergence to be an hours worked story, Americans must work more relative to Europeans now than they did in 2000. The opposite has happened. Birinci, Karabarbounis, and See in a 2026 NBER paper show that about half of the American-European hours gap that existed in the 1990s has reversed by the end of the 2010s. Americans work fewer hours per person than they did in 2000, while most Europeans work more. 5. Is America not a bad place to live? Walk around Alabama and France: surely the former cannot be substantially richer than the latter? American cities often have poorer centres and richer suburbs or exurbs. European cities preserve richer and more attractive historic cores. A visit to a city as a tourist in America compared with a city in France will leave one having seen different spots on the income distribution. Americans in Europe go to the nicest and richest European cities. Rather than a walking around test, do a driving around test. Go to the periphery of any modern American city and see a level of new-built material wealth that is extremely uncommon in Europe, with thousands of enormous four- or five-bedroom homes. In the South, in places like Nashville and Austin, drive around the downtowns to see hundreds of luxury apartment buildings springing from the ground. This construction boom is replicated virtually nowhere in Europe today. The other question is generational. Housing often costs more in Europe than in the United States, despite the quality of the housing stock generally being much better. Europe has nice city cores but these are inaccessible to young Europeans. Consider the salaries available to entry-level workers. The starting pay for a London police officer is $57,000. In Washington, DC, $75,000. The entry-level Deloitte consultant job in Madrid pays around €28,000, roughly $33,000 per year. In Charlotte, the entry-level Deloitte job pays $63,000. There are many things to dislike about life in America. But relative to 25 years ago, the gap in material wealth has shifted dramatically in America's favor. siliconcontinent.com/p/european-sta…

For the past few days we’ve been reading that once we correct for rising prices, living standards in the United States would be comparable to (Western) Europe.

Studying 3,590 reforms across 189 countries between 2005 and 2022 to determine whether and how regulations are reformed, from Simeon Djankov, Edward L. Glaeser, and Andrei Shleifer nber.org/papers/w35119

New in Trends in Cognitive Sciences (@TrendsCognSci) 👇 Why do people who love abstract art or imaginary worlds 🎨 also tend to get vaccinated 💉, support redistribution 💸, endorse animal rights 🐥, and try novel foods 🫐?

I rarely post on Europe because @lugaricano always has better takes than mine. It is hard to be the second act! His post this morning: siliconcontinent.com/p/the-two-euro… on the two Europes is particularly striking. Figure 1, which I reproduce here, is something European policymakers should keep in mind every day. Beyond the raw, somewhat abstract figures for GDP per capita, there is a reality I see every time I travel to Western Europe. I moved to the U.S. in 1996, six weeks after graduating from college. Every time I visit, I can tell that Spain (especially outside Madrid) is further behind the U.S. today than it was the day I left. The malaise in countries such as France, Germany, Italy, and Spain is not just economic. The public conversation is also more insular and focused on distributional fights over a pie that grows much less than in the past, with many more claimants. While I can listen to dozens of incredibly exciting podcasts in the U.S. about deep learning and technology, most of what one hears in Europe (Luis excepted!) is second-rate. Of course, this is not to say that everything is perfect in the U.S. Far from it. One only needs to ride the subway in Seoul a couple of times to realize that New York City is, on many dimensions, a major underperformer. When I visit New York City, I am not amazed by its prosperity but wonder how much richer it could be with a half-decent government. And California’s policies are a textbook example of how to waste the immense resources of one of the luckiest places on Earth. And Europe still has centuries of beautiful architecture and culinary traditions going for it But, Western Europe, thou art weighed in the balances, and art found wanting.

So much suffering for so little money saved

On cherche un ami des animaux avec un grand pré et une écurie pour ces deux poupous.

State socialism embraced the efficiency and scale of factory farming, causing the exact same harms to animals and the environment that capitalist animal ag does. There's a book about this:

📣 Bien-être animal : le règlement européen sur les « chiens et chats »définitivement adopté ! Hier, le Parlement européen a voté en plénière le règlement sur le bien-être et la traçabilité des chiens et des chats. Ce vote entérine l'accord trouvé en novembre dernier entre la Commission européenne, le Conseil de l'UE et le Parlement. 🐾 Une avancée majeure sur laquelle la BB s’est impliquée et qui marque un tournant pour la protection des animaux de compagnie en Europe (au sein des 27 états membres). 👉 Parmi les mesures clés adoptées, pour les éleveurs et les vendeurs : •⁠ ⁠Identification obligatoire par puce électronique et enregistrement pour tous les chiens et chats • Régulation des mutilations et de l'élevage d'animaux aux traits extrêmes • Renforcement de la règlementation pour réduire le commerce illegal Approuvé à une large majorité, le texte vise à harmoniser les conditions d'élevage, de détention et de commerce au sein de l'UE tout en luttant contre les trafics illégaux. Malheureusement, le règlement fait l’impasse sur la vente en animalerie. 📨 La FBB a cosigné, avec Eurogroup for Animals et plus de 300 associations européennes, une lettre ouverte pour renforcer la lutte contre le commerce illégal d'animaux de compagnie.

@brivael Intéressant. Les animaux aussi comptent parmi les plus vulnérables. Ils éprouvent bien-être et souffrance, comme souligné par Bentham, Mill ou Singer. Pourquoi n’auraient-ils pas aussi droit à la liberté ? Les libéraux modernes les oublient presque tjrs pourtant. Et vous ?

Votre situation est dure et je suis sincèrement désolé pour ce que vous avez traversé. Mais il y a une confusion importante à lever, parce qu'elle empoisonne tout le débat économique. Défendre la liberté et le mérite ne veut pas dire abandonner les vulnérables. C'est même l'inverse. Personne de sérieux dans le camp libéral ne dit qu'il faut laisser les mères isolées, les personnes âgées, les handicapés sans aide. Ce n'est pas le débat. Une société qui valorise la liberté économique est aussi celle qui peut réellement protéger ses plus fragiles, parce qu'elle produit la richesse nécessaire pour le faire. La fausse opposition liberté contre solidarité est une caricature. Les sociétés libérales prospères protegent mieux leurs vulnérables que les économies stagnantes, pour une raison simple : on ne redistribue que ce qui a été créé. Plus la création de richesse est forte, plus la capacité à aider ceux qui en ont besoin est réelle. Ce que défend une vision libérale bien comprise, ce n'est pas l'absence de filet de sécurité. C'est : - Une aide ciblée sur ceux qui ne peuvent pas se protéger eux-mêmes, plutôt qu'une distribution diluee à tout le monde. - Une responsabilité individuelle pour ceux qui le peuvent, ce qui libère les ressources pour ceux qui ne le peuvent pas. - Une société civile forte (familles, communautés, associations, charités) qui complète l'État plutôt que d'être remplacée par lui. Votre situation précise relève aussi d'un autre sujet : le droit civil du divorce et la protection patrimoniale du conjoint qui s'est consacré à la famille. Une vingtaine d'années de contribution non rémunérée à une entreprise familiale doit être reconnue juridiquement, et c'est le rôle du droit des contrats et du droit de la famille, pas nécessairement de l'État-providence. Ce sont deux débats distincts. Liberté, mérite et solidarité ne sont pas opposés. Ce sont des piliers complémentaires. C'est précisément quand on les oppose qu'on construit des systèmes qui échouent sur les trois.

📢 What’s current in #REEP? 📢 "Causal Inference for Biodiversity Conservation" by Kathy Baylis, Alberto Garcia, and Robert Heilmayr (@econ_servation). 📎Read this article here: buff.ly/zKIaAat

🩺 Explore key health metrics for your country We’ve published new country profiles on health for every country in the world. Each profile tells the story of a single country: how long people typically live, what they die from, what progress is being made against major diseases & risk factors, what share of children receive key vaccinations, and much more — all in one place. The image here is a snippet from the United States’ profile showing estimates for how many people die prematurely as a result of various risk factors, such as high blood pressure, obesity, and smoking. Many charts in each profile automatically include comparisons to other countries — e.g., in the same geographic region or at a similar income level — so you can understand each country in context.

Vegetarians have 13% lower cancer risk and vegans 23% lower cancer risk than meat-eaters, new meta-analysis finds.

This chart might look political, but it’s really about data science. The UK can rank great or poorly depending on the KPIs you choose. Our choice of data decides how we view reality.

Some numbers I continue to be proud of: - Our global health grants have saved over 100k lives - Our farm animal welfare work has improved conditions for 3B+ animals - We supported late-stage trials for the R21 malaria vaccine, now being rolled out to millions of kids globally

Why do we hate rats so much? In New York City, they’ve been called “public enemy number one.” For centuries, they’ve been blamed for the Black Death. But what if the story isn’t that simple? In this episode of Freakonomics Radio, we ask whether rats have become a convenient scapegoat and what our reaction to them reveals about us. Listen now, wherever you get your podcasts. podcasts.apple.com/us/podcast/why…