NIMBY zoning is killing us

From The Studies Show:

How much is [restrictive zoning] costing the US economy as a whole? A famous paper (Hsieh and Moretti, 2019) estimates the US economy would be almost 3.7% larger if only San Francisco, San Jose, and New York City had zoning laws that were less restrictive1. Amazingly, 40 percent of Manhattan buildings standing today would now be illegal to build, hinting at the vast extent of our zoning problems.

So why aren’t zoning laws less restrictive? Existing homeowners have no incentive to increase housing stock. In fact, they benefit from exclusionary zoning laws that increase the value of their real estate. But while existing homeowners profit, everyone else loses.

The United States, long a country famed for internal migration, has in recent decades had the lowest rate of migration since record keeping began in 1948. Fewer people are moving—which means they aren’t following jobs to the most productive areas of the country. Staying put in dying towns or unproductive regions has big consequences. While mortality has dropped across the developed world, middle-class American whites, many of them stuck in moribund rural areas, have been dying at accelerated rates.

Russian ruble is falling, but no one is buying its exports

 From MarginalRevolution:

...I also strongly disagree with those who say that cheaper ruble is “good” for exporters and the budget. Exporters have yet to make good use of devaluing ruble – which they can’t do, because Russia is under all sorts of embargoes, and China and other Global South countries are not opening their markets to most Russian goods.

...China is only buying our most basic commodities at heavy discounts, while keeping its market closed for other Russian goods. There’s no investment or technology coming into Russia from China and other Global South countries. Everything is dependent on state subsidies – but the government’s financial reserves are running thin.

Along with their low fertility rate, 1.52 (source), and it appears that Russia's future prospects are dim.

Advice to the New FTC Leadership

Here is the most important part (link): 

 II. Promote Innovation 

Since 2010, the U.S. economy has grown at a real rate of 1.74% per capita. At this rate, per capita income doubles every 40 years.4 When our kids turn 40, they will earn twice as much as we did.

Public policy—especially antitrust policy—should recognize that innovation drives growth, much of which comes from Big Tech and startups. Big Tech has provided consumers with more everyday value than any other small group of firms in history. And most startups “exit” via acquisition, not by going public. If the FTC prevents these exits due to concerns about lost potential competition, funding becomes harder to come by, which deters startups. The FTC should recognize these innovation incentives when setting enforcement priorities.

Here is press on the new Antitrust chief on "Taking on Big Tech and Beyond"

Slater will inherit a docket packed with blockbuster cases that aim to challenge the dominance of some of the world’s largest companies. These cases, many initiated during Trump’s first term, focus on allegations of monopolistic practices that harm consumers and stifle innovation.

Trump emphasized that Slater’s leadership will prioritize fair and vigorous enforcement of competition laws. “She will ensure that our competition laws are enforced, both vigorously and FAIRLY, with clear rules that facilitate, rather than stifle, the ingenuity of our greatest companies,” he stated.

The decision to place Slater in charge signals a continuation of the administration’s efforts to curb corporate concentration and promote competition across key sectors of the economy. With both Trump and Vance championing a tough stance on monopolistic practices, Slater’s tenure is expected to mark a pivotal chapter in the U.S. government’s approach to antitrust enforcement.

More on Business Dynamism

Over at the Geek Way, Andrew McAfee has created a startling visualization related to entrepreneurship in the US and EU. The Draghi Report on EU competitiveness is generating a small buzz among economists. One startling claim is that

there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period.

But the visualization makes the contrast even more stark. US entrepreneurs have has dominated.

 

US institutions have made it the primary source for innovation. Coste and Coatanlem suggest a cause has to do with greater labor market regulation inflating the costs of failure in the EU. Other causes?