2026-04-27 03:41:21
You would be surprised to learn that almost 69% of the US mushroom production occurs in the borough of Kennett Square, Pennsylvania. It is a small town of about 6000 people, but mushroom-growing facilities around town produce almost 451 million pounds of mushrooms annually (2024). 451 million pounds of mushrooms would occupy about 45 American football fields or 35 soccer fields. The dollar value of mushroom production in the US is roughly $ 1 billion per year.
China is the undisputed leader in mushroom production. China accounts for 93% of the world’s global mushroom production.
That is from Rhishi Pethe, here is the full story, via Anecdotal. Much of the piece is about why mushroom production is switching to Canada.
The post Mushroom facts of the day appeared first on Marginal REVOLUTION.
2026-04-27 00:50:03
1. Why AI can simulate but not instantiate consciousness.
2. Why you should start a company instead of working in aid.
3. Evidence that tennis has become less interesting?
4. A smidgen more on wet market origins.
5. Who is most (least) opposed to European immigration?
6. John Burn-Murdoch on the Jevons paradox and AI employment effects (FT).
7. Can plants sense the sound of rain?
8. Zena.
The post Sunday assorted links appeared first on Marginal REVOLUTION.
2026-04-26 17:27:08
This paper studies how Generative AI (Gen AI) is reshaping the U.S. startup ecosystem. Exploiting the release of ChatGPT, we show that startups with greater pre-release Gen AI task exposure reduced employment within two quarters, primarily among junior and implementation roles. Displaced workers experienced longer unemployment spells and moved to lower-paying but less exposed jobs. Conversely, exposed startups increased productivity, scaled faster, and accelerated through financing rounds. Venture capital shifted toward frequent, smaller investments, boosting new firm formation. Overall, incumbent contraction was offset by new firm formation, leaving aggregate employment unchanged but shifting composition to senior roles.
That is from a new and important paper by Abhinav Gupta, Franklin Qian, Elena Simintz, & Yifan Sun.
The post Generative AI and Entrepreneurship appeared first on Marginal REVOLUTION.
2026-04-26 13:09:28
A tenth of a percentage point of extra productivity growth — well within the range of plausible near-term AI effects — raises the fundamental value of U.S. government debt by $1.3 trillion. If markets fully priced this in, nominal Treasury yields would fall by about 70 basis points.
Half a percentage point of extra growth would raise the value of the debt by $6.5 trillion. For context: under the CBO baseline, the debt-to-GDP ratio rises from 100% today to 172% by 2055. Under the +0.5pp scenario, it stabilizes near 124%. Debt-to-GDP stops exploding. That is an enormous change in the fiscal outlook, and it comes from a rate of growth only modestly above the post-2000 average…
There is a second, subtler point. Because revenue scales as GDP^1.07, the fundamental value of the debt is a convex function of productivity growth. A +1pp growth shock raises value by 108%; a −1pp shock only lowers it by 87%.
That asymmetry means bondholders gain from uncertainty, not just from higher expected growth. If markets become more uncertain about AI’s long-run productivity impact, and that uncertainty is mean-preserving, Treasury valuations should still rise. Holding expected growth fixed, ±0.5pp of growth uncertainty is worth about $0.7 trillion in convexity value. Treasuries embed a long call option on AI, and the option is valuable even when the strike is out of the money.
Here is more from Hanno Lustig, with Howard Kung and James Paron. Here is the full paper. These are of course very important results, kudos to the authors. Via the excellent Samir Varma.
The post Will AI save the U.S. fiscal situation? appeared first on Marginal REVOLUTION.
2026-04-26 00:32:34
2. Claude doing stand-up comedy, the video is AI too.
3. Thirty more lines from Empedocles have been found.
4. Latin America’s oil resurgence.
5. 25 dead at the Haitian Citadelle.
6. A paean to the earlier University of Chicago law school.
7. Can AI agents read a social science paper and write the code from scratch to reproduce its results?
8. Papers of Hayek are now accessible online.
The post Saturday assorted links appeared first on Marginal REVOLUTION.
2026-04-25 19:19:22
The trade accounts are among the most pernicious statistics ever collected. It’s long been remarked, for example, that merely by calling something a “deficit” it seems bad even though a current account deficit is matched by a financial account surplus. Put that issue aside, however, because the real problems are much deeper. The international accounts make it appear that individuals, in their ordinary buying and selling, bind us all in a collective endeavor. The accounts take millions of voluntary, mutually beneficial transactions between individuals and firms and repackage them as a relationship between nations—as if “America” were buying from “China”. Many, many experts get this wrong—not just non-economists who are misled by terms like “deficits.”
Don Boudreaux at Cafe Hayek gives a truly excellent example in replying to a reader who asks:
The USA ran trade deficits for 50 years. Those were offset by foreigners’ investments in the USA. Foreigners expect returns on these investments. Doesn’t it mean Americans eventually have to pay those returns to foreigners?
Don’s answer:
No.
The only Americans who are obliged to pay anything to foreigners are Americans who borrowed money from foreigners. (This number includes U.S. citizens-taxpayers whose government borrowed money from foreigners.) But no such obligation exists for other investments that foreigners made in the U.S. – those other investments being equity investments in the U.S. (for example, foreigners buying a restaurant in Houston), purchases of real estate in the U.S., and holding U.S. dollars.
If, for example, the foreign-owned restaurant in Houston goes bankrupt, the loss is fully borne by its foreign owners; no American is obliged to pay anything on that account to foreigners.Of course, foreigners do expect positive returns on all of their U.S. investments, regardless of form. But with the exception of Americans’ repayment of principal and interest on funds that they borrowed from foreigners, no returns that foreigners earn on their investments in America are paid by Americans. If the foreign-owned restaurant in Houston is profitable, those profits are newly created wealth – wealth that’s created by that restaurant’s foreign owners.
In the international commercial accounts, when the restaurant’s foreign owners realize returns on their restaurant – say, by being paid dividends drawn on that restaurant’s profits – it appears that Americans are paying foreigners. This appearance comes from the fact that dollars flow from the U.S. to abroad, and so are recorded as payments from America to a foreign country or countries. But this appearance is misleading. America, as such, doesn’t pay those returns to the restaurant’s foreign owners. Nor do any flesh-and-blood Americans pay those returns. Those returns, again, are new wealth created by the restaurant’s foreign owners; economically, those returns are paid to the restaurant’s foreign owners by the restaurant’s foreign owners.
But the international commercial accounts mask this economic reality. What appears in the commercial accounts as payments by America to foreign countries are no such thing. This accounting mistakes geography for economic reality. Untold confusion is unleashed by supposing that, just because these dollar-denominated returns are created in the U.S. and then sent abroad to foreigners, these dollar-denominated returns are necessarily paid by Americans to foreigners.
As Don says, the trade accounts commit a kind of category error: they categorize geographic location, a where, and treat it as a who, as if “nations” traded. But nations don’t trade, people trade. This confusion wouldn’t matter too much if the statistics stayed in the back pages of government reports. But they don’t. They land on the front page, they shape policy, and they frame negotiations. When a president claims that “we lost $500 billion” to “crazy trade” with China, he is reading the international accounts as a story about nations in competition. The accounting creates the narrative. the narrative creates the policy. Bad accounting leads to bad policy. We would, in fact, all be better off if the trade accounts simply disappeared.
The post The Pernicious Trade Account appeared first on Marginal REVOLUTION.