Economics – Economist Writing Every Day

Summary of You Wouldn’t Steal a Car

January 3, 2026January 5, 2026Joy Buchanan1 Comment

I have a new working paper with Bart Wilson titled: “You Wouldn’t Steal a Car: Moral Intuition for Intellectual Property”

This quote from the introduction explains the title:

… in the early 2000s… the Motion Picture Association of America (MPAA) released an anti-piracy trailer shown before films that argued: (1) “You wouldn’t steal a car,” (2) pirating movies constitutes “stealing,” and (3) piracy is a crime. The very need for this campaign, and the ridicule it attracted, signals persistent disagreement over whether digital copying constitutes a moral violation.

The main idea:

In contemporary economies, “idea goods” comprise a substantial share of value. Our paper examines how norms evolve when individuals evaluate harm after the taking of nonrivalous resources such as digital files.

We report experimental evidence on moral evaluations of unauthorized appropriation, contingent on whether the good is rivalrous or nonrivalrous. In a virtual environment, participants produce and exchange two types of resources: nonrivalrous “discs,” replicable at zero marginal cost, and rivalrous “seeds,” which entail positive marginal cost and cannot be simultaneously possessed or consumed by multiple individuals. Certain treatments allow unauthorized taking, which permits observation of whether participants classify such actions as moral transgressions.

Participants consistently label the taking of rivalrous goods as “stealing,” whereas they do not apply the same term to the taking of nonrivalrous goods.

To test the moral intuition for taking ideas, we create an environment where people can take from each other and we study their freeform chat. The people in the game each control a round avatar in a virtual environment, as you can see in this screenshot below.

In the experiment, “seeds” represent a rivalrous resource, meaning they operate like most physical goods. If the playerin the picture (Almond) takes a seed from the Blue player, then Blue will be deprived of the seed, functionally the equivalent of one’s car being stolen.

Thus, it is natural for the players to call the taking of seeds “stealing,” Our research question is whether similar claims will emerge after the taking of non-rivalrous goods that we call “discs.”

The following quote from our paper indicates that the subjects do not label or conceptualize the taking of digital goods (discs) as “stealing.”

Participants discuss discs often enough to reveal how they conceptualize the resource. In many instances, they articulate the positive-sum logic of zero-marginal-cost copying. For example, … farmer Almond reasons, “ok so disks cant be stolen so everyone take copies,” explicitly rejecting the application of “stolen” to discs.

Participants never instruct one another to stop taking disc copies, yet they frequently urge others to stop taking seeds. The objection targets the taking away of rivalrous goods, not the act of copying per se. As farmer Almond explains in noSeedPR2, “cuz if u give a disc u still keep it,” emphasizing that artists can replicate discs at zero marginal cost.

We encourage you to read the manuscript if you are interested in the details of how we set up the environment. The conclusion is that it is not intuitive for people to view piracy as a crime.

This has implications for how the modern information economy will be structured. Consider “the subscription economy.” Increasingly, consumers pay recurring fees for ongoing access to products/services (like Netflix, Adobe software) instead of one-time purchases. Gen Z has been complaining on TikTok that they feel trapped with so many recurring payments and lack a sense of ownership.

In a recent interview on a talk show called The Stream, I speculated that part of the reason companies are moving to the subscription model is that they do not trust consumers with “ownership” of digital goods. People will share copies of songs and software, if given the opportunity, to the point where creators cannot monetize their work by selling the full rights to digital goods anymore.

A feature of our experimental design is that creators of discs get credit as the author of their creation even when it is being passed around without their explicit permission. Future work could explore what would happen if that were altered.

Tariffs Are Not Smart Industrial Policy

January 2, 2026January 2, 2026Zachary Bartsch2 Comments

Economists overwhelmingly see tariffs as clearly welfare-reducing. Tariffs on imports result in higher prices, fewer imports, less consumption, and more domestic production. In fact, it is the higher prices that solicit and make profitable the greater domestic production. We don’t get the greater domestic output at the pre-tariff price. We can show graphically that domestic welfare is harmed with either export or import tariffs. The basic economics are very clear.

However, the standard model of international trade makes a huge assumption: Peace. That is, the model assumes that there are secure property rights and no threats of violence. All transactions are consensual. This is where the political scientists, who often don’t understand the model in the first place, say ‘Ah ha!. Silly economists…’ They proceed to argue for tariffs on the grounds of national security and the need for emergency manufacturing capacity. But is an intellectual mistake.

Just as economists have a good idea for how to increase welfare with exchange, we also have good ideas about how to achieve greater or fewer quantities transacted in particular markets. This is not a case of economists knowing the ideal answer that happens to be politically impossible. Rather, if it pleases politicians, economists can provide a whole menu of methods to increase US manufacturing, vaccine manufacturing, weapons manufacturing… Heck, we can identify multiple ways to achieve more of just about any good or service. Let the politicians choose from the menu of alternatives.

The problem with tariffs is that they reduce consumer welfare a lot, given some amount of increased production in the protected industry. Importantly, this assumes that the tariffs aren’t hitting inputs to those industries and are only being applied to direct foreign competitors. The below argument is even stronger against imperfectly applied tariffs, like the US tariffs of 2025.

What’s the alternative?

The alternative is a more focused tack. If the government wants more missile or ship production, then what should it do? There’s plenty, but here’s a short list of more effective and less harmful alternatives to tariffs:

Continue reading →

How Good Were 2025 Forecasts?

January 1, 2026January 1, 2026James BaileyLeave a comment

Last January I shared a roundup of forecasts for the year from markets and professional economists. Were they any good? Here was their prediction for the US economy:

WSJ’s survey of economists reports that inflation expectations for 2025 were around 2% before the election, but are closer to 3% now. Their economists expect GDP growth slowing to 2%, unemployment ticking up slightly but staying in the low 4% range, with no recession. The basic message that 2025 will be a typical year for the US macroeconomy, but with inflation being slightly elevated, perhaps due to tariffs.

The verdicts (based on current data, which isn’t yet final for all of 2025):

Inflation: Nailed it exactly (2.7%)

GDP: We’re still waiting on Q4, but 2025 as a whole is on track to be a bit above the 2.0% forecast.

Unemployment: 4.6% as of November 2025, a bit above the 4.3% forecast

Recession: Didn’t happen, making the 22% chance forecast look fine

So the professional forecasters were probably a bit low on GDP and unemployment, but overall I’d say they had a good year. What about prediction markets?

For those who hope for DOGE to eliminate trillions in waste, or those who fear brutal austerity, the message from markets is that the huge deficits will continue, with the federal debt likely climbing to over $38 trillion by the end of the year. This is one reason markets see a 40% chance that the US credit rating gets downgraded this year.

While the US has only a 22% chance of a recession, China is currently at 48%, Britain at 80%, and Germany at 91%. The Fed probably cuts rates twice to around 4.0%.

Deficits: Nailed it, the federal debt is currently around $38.4 trillion.

US Credit Downgrade: It’s hard to score a prediction of a 40% chance of a binary event happening, but in any case Moodys downgraded the US’ credit rating in May, so that all three major agencies now rate it as not perfect.

The Fed: Cut rates a bit more than expected.

Foreign Recessions: China and Britain avoided recessions. Germany had a recession by the technical definition of Kalshi’s market, but not really in practice (FRED shows -0.2% Real GDP growth in Q2 followed by 0.00000% growth in Q3). Britain avoiding recession when markets showed an 80% chance was the biggest miss among the forecasts I highlighted.

Overall though, I’d say forecasters did fairly well in predicting how 2025 turned out, in spite of curveballs like the April tariff shock.

If you think the forecasters are no good and you can do better, you have more options than ever. Prediction markets are getting more questions and more liquidity if you’re up for putting your money where your mouth is; if you don’t want to put your own money at risk, there are forecasting contests with prizes for predicting 2026.

2025 in Data

December 31, 2025December 31, 2025Jeremy Horpedahl1 Comment

By almost any measure, 2025 was a great year for the United States.

Despite inflation remaining elevated and the damage from new tariffs, the economy did well. Inflation-adjusted median earnings are higher than a year ago, though only by about 1.3%. While most prices are still rising, one bright spot for affordability is that home prices are falling in much of the country (according to Zillow estimates).

The S&P 500 total return is over 18% in 2025. GDP has grown at an annualized rate of about 2.5% for the first three quarters of 2025, and will probably be around 3% in the 4th quarter — not a blockbuster rate of growth, but continuing improvement for our already record high GDP of 2024.

The unemployment rate did tick up slightly, from 4.2% last November to 4.6% currently. This is definitely an indicator to watch over the next few months, but it is still well below average.

But even outside of the economy, there is plenty of good news in the data. Crime rates are plummeting. The murder rate fell something like 20%, as well as every major category of crime (violent crime overall is down 10%). This are some of the largest one-year drops in crime the US has ever seen.

Homicides aren’t the only category of deaths that are falling in 2025. For most categories of death as tracked by the CDC, there is a long lag (6 months or more) before all of the deaths are categorized. So we can’t look at complete 2025 data yet. For example, drug overdoses have increased massively in recent years, especially during the pandemic. But after plateauing in 2021-23, drug ODs started falling in 2024 and have continued to fall in early 2025. For the 12 months ending in April 2025, drug OD deaths were 26% lower than the prior 12 months. If we look at just the first 5 months of the year, 2024 was 20% lower than 2023, and 2025 was another 20% lower than 2024. For the first five months of 2025, ODs are basically back down to the same level as 2018 and 2019. Motor vehicle deaths also increased during the pandemic, but they are down 8% in the first half of 2025, essentially back down to 2018-19 levels.

Was it all good news? No, you can certainly find some data to be pessimistic about. For example, despite the efforts of DOGE and other attempts to cut federal government spending, over $2 trillion was added to the national debt in 2025, up 6 percent from the end of 2024 and surpassing $38 trillion. And as I mentioned above with the unemployment rate, there is some evidence the labor market may be weakening.

Not all is rosy as we head into 2026, but 2025 was a year filled with many positive trends on the economic front and in society more generally. May your new year be prosperous and healthy!

Investing: You Vs. All Possible Worlds

December 26, 2025December 26, 2025Zachary Bartsch1 Comment

This post illustrates a couple of things that I learned this year with an application in finance. I learned about the simplex when I was researching amino acids. I learned some nitty-gritty about portfolio theory. These combined with my pre-existing knowledge about game theory and mixed strategy solutions.

Specifically, I learned a way of visualizing all possible portfolio returns. This post narrowly focuses on 3 so that I can draw a picture. But the idea generalizes to many assets.

Say that I can choose to hold some combination of 3 assets (A, B, & C), each with unique returns of 0%, 20%, and 10%. Obviously, I can maximize my portfolio return by investing all of my value in asset B. But, of course, we rarely know our returns ex ante. So, we take a shot and create the portfolio reflected in the below table. Our ex post performance turns out to be a return of 15%.

That’s great! We feel good and successful. We clearly know what we’re doing and we’re ripe to take on the world of global finance. Hopefully, you suspect that something is amiss. It can’t be this straightforward. And it isn’t. At the very least, we need to know not just what our return was, but also what it could have been. Famously, a monkey throwing darts can choose stocks well. So, how did our portfolio perform relative to the luck of a random draw? Let’s ignore volatility or assume that it’s uncorrelated and equal among the assets.

Visualizing Success with Two Assets

Say that we had only invested in assets A and B. We can visualize the weights and returns easily. The more weight we place on asset A, the closer our return would have been to zero. The more weight that we place on asset B, the closer our return would have been to 20%.

If we had invested 75% of our value in asset B and 25% in A, then we would have achieved the same return of 15%. In this two-asset case, it is clear to see that a return of 15% is better than the return earned by 75% of the possible portfolios. After all, possible weights are measures on the x-axis line, and the leftward 75% of that line would have earned lower returns. Another way of saying the same thing is: “Choosing randomly, there was only a 25% that we could have earned a return greater than 15%.”

Visualizing Success with Three Assets

Continue reading →

What to Do Before the New Year?

December 25, 2025December 23, 2025James BaileyLeave a comment

Merry Christmas! I’m gifting you a couple ideas for money things to do in the remaining six days of 2025.

Ways to Help Yourself

Money in US Flexible Spending Accounts (FSAs) often disappears if not requested by New Year’s Day. Don’t forget to draw these down- especially it is a Dependent Care FSA, which can’t carry any money over to the new year. The money goes back to your employer if you don’t spend it, which means they don’t have an incentive to remind you themselves; so I’ll remind you to save you from having to go Krieger.

The next few days are also your last chance to do most tax-deductible spending in 2025, which could be business expenses, or contributing to tax-deductible accounts that don’t expire like a 401k or HSA (not FSA). See a more detailed list of tax ideas here. Depending on your situation (especially whether you itemize), this might also be a good time to make tax-deductible donations, which would:

Help Others

There are many good causes to donate to, but funding high-value low-cost health interventions in poor countries was probably the cheapest reliable way to save a life even before this year. When one of the largest funders of global health, USAID, was shut down this year, the marginal benefit of donations to global health likely went even higher. Givewell does the cost-effectiveness calculations to identify good options for specific charities in this area, like Helen Keller International. I like that I’ve been donating to these charities for years via Givewell’s donation portal and none of them have ever called me (since they don’t require a phone number) or mailed me anything.

*This picture shows all the remains of the website of USAID, an agency that spent $32 billion in FY 2024*

See you all in 2026

Groceries in November 2025 are the Most Affordable They Have Ever Been

December 24, 2025December 24, 2025Jeremy HorpedahlLeave a comment

In surveys more than two-thirds of Americans say they are are struggling with the cost of groceries. And yet, relative to average wages:

The chart shows a simple measure of relative grocery affordability. Starting with the levels of wages and grocery prices in 1947, if in any year wages increase more than prices, the line goes up (it can also go down, as it does in some years). Cumulatively, you can see that today groceries are over twice as affordable as in 1947.

You could reasonably complain that there hasn’t been much progress since the early 1970s. Fair enough. But there has been significant progress since the 1990s. Even if the progress is less than we would have liked, groceries are still, right now, the most affordable they have ever been in the US relative to average wages. And since US consumers spend by far the lowest share of their income on groceries in the world, we might be tempted to say that right now groceries in the US are the most affordable they have ever been in human history. Period.

This is not just a trick of using average wages, which can be distorted by outliers. First, we are already using an average wage series that strips out the highest earners (supervisors, managers, etc.). But we can show this more clearly by using a median-wage series, such as the CPS series (calculated by EPI) starting in 1973. Notice this affordability trend gets slightly better if we use median wages from 1973-2024:

It’s true that using the median wage series, 2020 and 2021 look more affordable than 2024 — but that’s because the compositional effects of the job losses in the pandemic really throw off the median wage. But the growth rate since 1973 is slightly better for median rather than average wages — it’s not a trick! And when we have the median wage data for 2025, it will also likely be the most affordable measure on this chart.

So why are people so pessimistic if wages have been rising faster than grocery prices? One theory: availability bias. People focus on the prices where they notice goods becoming less affordable, but ignore the ones that are more affordable. Many consumers could probably tell you that a dozen eggs increased from $1.40 per dozen in November 2019 to $2.86 today, and at times was much higher, topping $6 briefly in early 2025. Likewise they could tell you that a pound of ground beef soared from $3.81 in late 2019 to $6.54 today. Both of these prices increases vastly exceed wage increases over the same timeframe (about 33 percent for wages), but most consumers probably couldn’t tell you that these were outliers and most major categories of food increased by less than average wages since late 2019:

While the “beef and veal” category has clearly outpaced wages — by almost twice as much! — nearly every other category of meat and as well as other food product prices increased less than wages. Poultry is the one exception, though here it is almost equal to wage increases. But if we are talking about pork or fish, or the non-meat categories, most food is more affordable than in late 2019 relative to wages. Consumers won’t as easily identify these more affordable categories, and they probably have no idea how much average wages increased.

A Visual Summary of the 2025 Economics Nobel Lectures

December 23, 2025December 23, 2025Scott BuchananLeave a comment

Fellow EWED blogger Jeremy Horpedahl generally gives good advice. Therefore, when the other week he provided a link and recommended that we watch Joel Mokyr’s 2025 Nobel lecture*, I did so.

There were three speakers on that linked YouTube, who were the economics laureates for this year. They received the prize for their work on innovation-driven economic growth. The whole video is nearly two hours long, which is longer than most folks want to listen to, unless they are on a long car trip. Joel’s talk was the first, and it was truly engaging.

For time-pressed readers here, I have snipped many of the speakers’ slides, and pasted them below, with minimal commentary.

First, here are the great men themselves:

Talk # 1. Joel Mokyr: Can Progress in Innovation Be Sustained?

And indeed, one can find pieces of evidence that point in this direction, such as the slower pace of pharm discoveries.

But Joel is optimistic:

Joel provides various examples of advances in theoretical knowledge and in practical technology (especially in making instruments) feeding each other. E.g., nineteenth century advances in high resolution microscopy led to study of micro-organisms which led to germ theory of disease, which was one of the all-time key discoveries that helped mankind:

So, on the technical and intellectual side, Joel feels that the drivers are still in place for continued strong progress. What may block progress are unhelpful human attitudes and fragmentation, including outright wars.

Or, as Friedrich Schiller wrote, “Against stupidity, the gods themselves contend in vain”.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Talk # 2: Philippe Aghion, The Economics of Creative Destruction

He commented that on the personal level, what seems to be a failure in your life can prove to be “a revival, your savior” (English is not his first language; but the point is a good one).

Much of his talk discussed some inherent contradictions in the innovation process, especially how once a new firm achieves dominance through innovation, it tends to block out newer entrants:

KEY SLIDE:

Outline of the rest of his talk:

[ There were more charts on fine points of his competition/innovation model(s)]

Slide on companies’ failure rate, grouped by age of the firm:

His comment..if you are a young , small firm, it only takes one act of (competitors’) creative destruction to oust you, whereas for older, larger, more diverse firms, it might take two or three creative destructions to wipe you out.

He then uses some of these concepts to address “Historical enigmas”

First, secular stagnation:

[My comment: Total factor productivity (TFP) growth rate in economics measures the portion of output growth not explained by increases in traditional inputs like labor and capital. It is often considered the primary contributor to GDP growth, reflecting gains from technological progress, efficiency improvements, and other factors that enhance production]

I think this chart was for the US. Productivity, which grew fast in the 1996-2005 timeframe, then slowed back down.

In the time of growth soaring, there was increased concentration in services. The boost in ~1993-2003 was a composition effect, as big techs like Microsoft, Amazon, bought out small firms, and grew the most. But then this discouraged new entries.

Gap is increasing between leaders and laggers, likely due to quasi-monopoly of big tech firms.

Another historical enigma – why do some countries stop growing? “Middle Income Trap”

Made a case for Korea, Japan growing fastest when they were catching up with Western technology, then slowed down.

China for past 30 years has been growing by catching up, absorbing outside technology. But the policies for pioneering new technologies are different than those for catching up.

Europe: During WWII lot of capital was destroyed, but they quickly started to catch up with US (Europe had good education, and Marshall plan rebuilt capital)…but then stagnated, because not as strong in innovation.

Europeans are doing mid-tech incremental innovation, whereas US is doing high tech breakthrough.

[my comment: I don’t know if innovation is the whole story, it is tough to compete with a large, unified nation sitting on so much premium farmland and oil fields]

Patents:

Red =US, blue=China, yellow=Japan, green=Europe. His point: Europe is lagging.

Europe needs true unified market, policies to foster innovation (and creative destruction, rather than preservation).

Finally: Rethinking Capitalism

GINI index is a measure of inequality.

Death of unskilled middle-aged men in U.S.…due in part to distress over of losing good jobs [I’m not sure that is the whole story]. Key point of two slides above is that US has more innovation, but some bad social outcomes.

So, you’d like to have best of both…flexibility (like US) AND inclusivity (like Europe).

Example: with Danish welfare policies, there is little stress if you lose your job (slide above).

Found that innovation (in Europe? Finland?) correlated with parents’ income and education level:

…but that is considered suboptimal, since you want every young person, no matter parents’ status, to have the chance to contribute to innovation. Pointed to reforms of education in Finland, that gave universal access to good education..claimed positive effects on innovation.

Final subtopic: competition. Again, the mega tech firms discourage competition. It used to be that small firms were the main engine of job growth, now not so much:

Makes the case that entrant competition enhances social mobility.

Conclusions:

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Talk # 3. Peter Howitt

The third speaker, Peter Howitt showed only a very few slides, all of which were pretty unengaging, such as:

So, I don’t have much to show from him. He has been a close collaborator of Philippe Aghion, and he seemed to be saying similar things. I can report that he is basically optimistic about the future.

* The economics prize is not a classic “Nobel prize” like the ones established by the Swedish dynamite inventor himself, but was established in 1968 by the Swedish national bank “In Memory of Alfred Nobel.”

Here is an AI summary of the 2025 economics prize:

The 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for their groundbreaking work on innovation-driven economic growth. Mokyr received half of the prize for identifying the prerequisites for sustained growth through technological progress, emphasizing the importance of “useful knowledge,” mechanical competence, and institutions conducive to innovation. The other half was jointly awarded to Aghion and Howitt for developing a mathematical model of sustained growth through “creative destruction,” a concept that explains how new technologies and products replace older ones, driving economic advancement. Their research highlights that economic growth is not guaranteed and requires supportive policies, open markets, and mechanisms to manage the disruptive effects of innovation, such as job displacement and firm failures. The award comes at a critical time, as concerns grow over threats to scientific research funding and the potential for de-globalization to hinder innovation.

Joy on The Subscription Economy

December 20, 2025December 20, 2025Joy Buchanan2 Comments

An Al Jazeera talk show called The Stream had me back again for

“Why subscriptions are taking over our lives”

along with journalist guest Sanya Dosani.

Our episode began with some clips from TikTok of young people expressing anger over feeling trapped in “the subscription economy.” Watch our show at the link above to see.

The subscription economy is a business model shift where consumers pay recurring fees for ongoing access to products/services (like Netflix, SaaS) instead of one-time purchases, focusing on “access over ownership” for predictable revenue. Gen Z feels upset that they are getting charged for subscriptions, some of which they simply forgot to cancel. They have nostalgia for the days of toting a zipper case of CDs onto the yellow school bus in 2004.

My commentary starts around minute 5:30 in the show. The first thing I point out is that, by and large, we have more entertainment available to us at a lower price than people did in that bygone era of mostly cable TV and physical discs. (This is a bit like the point I made on The Stream in March 2025 about how fast fashion represents more stuff for consumers at lower prices, which is good.)

In the episode, we discussed how people can still buy CDs today. Sanya Dosani made the point that, “there’s a place for buying and a place for renting.” Everyone should be aware of how cheap DVDs, books, and CDs are at rummage sales in the United States in 2025. You can get a music album for 50 cents. Some youths have (re)discovered that DVD players are cheaper than a year of streaming subscription costs.

Around minute 17, I got to bring up my research about intellectual property, digital goods, and morality.

I have two papers with Bart Wilson about taking and digital goods. In 2014, we published “An Experiment on Protecting Intellectual Property”.

And now we have a new working paper titled “You Wouldn’t Steal a Car: Moral Intuition for Intellectual Property” that makes a clean comparisons between the taking of rivalrous physical goods versus nonrival digital goods.

We find that people do not feel bad about taking the digital goods, or “pirating.” We even find that, in a controlled experiment with no previous context for what we might call intellectual property protection, the creators of these digital goods do not call such taking stealing either. It seems to be understood that folks will take and share if they can.

The proposed reason for artificially restricting the taking and resale of intellectual property is that creators need a way to profit from providing a public good. (Intellectual property rights in the U.S. Constitution are covered by Article I, Section 8.)

I said in the interview, “If you were able to just give a song to all of your friends, you probably would, and then that artist might not be able to make songs the next year.”

Thus, I suggested, “The subscription economy is a reaction to the fact that most people don’t view it as wrong to take things they can take and not necessarily pay for them. Companies had to find a new way to be able to make money and stay in business.”

I’ll clarify that I have not done quantitative research to prove that subscription models emerged causally because of pirating. I’m speculating. Another side to this is that people simply want to stream and companies are providing exactly what people want (despite the complaints circulating on TikTok). People reminisce about the “golden days” of early Netflix, but most people forget that the company was losing money at that time. Media production and distribution companies have to make money to stay in business.

At the end, the host asked me, “… what does it mean for who we are as humans, more of an existential question, where we are going with this age?”

That’s a deeper question than you might expect for a conversation about CD-ROMs. However, people do care about having some tangible form of art about them. Think of the ancients buried alongside beads and dolls. Netflix will never be the only thing that people want. As for Gen Z being upset about convenient Spotify, “what does it mean for who we are” has got to be part of it.

References:

“An Experiment on Protecting Intellectual Property” (2014) with Bart Wilson. Experimental Economics, 17:4, 691-716.

“You Wouldn’t Steal a Car: Moral Intuition for Intellectual Property,” with Bart Wilson

As an aside, furthermore, I’ll say here on the blog that Gen Z is by some measures the most entertained generation in history. For spiritual, not financial, reasons, I encourage them to cancel their subscriptions, take out their AirPods, and feel the silence and dread for a week.

Consumption Then and Now: 2019-2025

December 19, 2025December 18, 2025Zachary BartschLeave a comment

In aggregate, consumer spending on different broad categories of goods is relatively stable. The year 2019 feels like forever ago – and it was more than half a decade ago. But since then we’ve been hit by a pandemic and an AI shock and a trade war, and tariffs, and… plenty. We live in different times. Except, broadly, consumers are spending their money much as they did six years ago. Let’s compare some data from the 2^nd quarter of 2019 and 2025.

First the Spending

Consumption spending is categorized in the below table.

If total consumption spending (not inflation-adjusted) is 100%, then how has the allocation of spending changed? Below is a graph comparing each consumption component’s 2019 share versus 2025. The dotted line denotes an identical share. I haven’t labeled the categories because, suffice it to say, that spending shares are little different. None is more than one percentage point different.

The below figure displays the spending share difference. We’re spending less of our consumption on gasoline and the like, recreational services, and clothing. Surprisingly, we’re also spending less on healthcare and food for off-premises consumption (non-restaurants). However, we’re spending a greater share on housing, recreational goods, food services for on-premises consumption (restaurants).