Recommended Weekend Reads

Geoeconomics

The Innovation Paradox MF Finance and Development Magazine
We've long assumed that investing more in research and development is a surefire way to spur innovation, increase productivity, and fuel job creation and economic growth. And yet, as the US dramatically expanded R&D spending over the past four decades, the opposite happened. Innovation, productivity gains, and economic expansion slowed. What went wrong?
High and Rising Institutional Concentration of Award-Winning Economists National Bureau of Economic Research/Richard Freeman, Danxia Xie, Hanzhe Zhang, Hanzhang Zhou
Abstract: We analyze the institutional clustering of award-winning researchers. We collect nearly 300,000 annual education and career affiliations of nearly 6,000 award-winning researchers across 18 major academic fields in the natural sciences, engineering, and social sciences. All fields, except for economics, exhibit a low and decreasing concentration, which suggests a trend toward decentralized knowledge production. Conversely, economics shows a high and rising concentration. We investigate potential reasons for this anomaly, including researcher mobility, reliance on physical assets, the age of fields, the role of prestige, and the influence of the United States in shaping disciplinary norms (Fulcrum Note: So, this proves economists do roam in packs? Hmmm…)

India

Can India Change Course? A Conversation with Pratap Bhanu Mehta Foreign Affairs Podcast
Pratap Bhanu Mehta, President of the Centre for Policy Research, is one of India’s wisest political observers—a great political theorist and writer as well as a fierce critic, and occasional target, of Modi and his policies. Foreign Affairs Senior Editor Kanishk Tharoor spoke with him on September 3 about what the election means for Indian democracy and where the country goes from here.

European Union

The Future of European Competitiveness: A Comprehensive Strategy for Europe Mario Draghi
Former European Central Bank President and former Italian Prime Minister was asked by EU President Ursula von der Leyen to conduct a comprehensive study on how the European Union could become more competitive with the US and China. This past week, Draghi published a 400-page comprehensive and wide-ranging report offering recommendations for ten main economic sectors. Overall, Draghi says the EU needs to invest between €750 - €850 billion per year – close to 5% of the bloc’s GDP – to stay competitive in the face of shrinking populations, the need to rapidly and massively ramp up combined defense capabilities, and offset the supply of previously cheap energy (mostly coming from Russia).

A World of Chips Acts: The Future of U.S.-EU Semiconductor Collaboration Center for Strategic and International Studies
The U.S. and the EU have each recently enacted legislation providing for an unprecedented volume of public investments in semiconductors, with the largest portion allocated to the establishment of new onshore chip production facilities. Substantial funds are also allocated to semiconductor research and development, supply chain security, and workforce expansion and training. These parallel initiatives have been prompted by an awareness in both regions of threats to economic and strategic security arising out of their dependency on foreign-made chips. The question posed by the enactment of the two Chips Acts is how such joint activities can be deepened, broadened, and leveraged by direct engagement between the United States, the European Union, and national authorities to address the vulnerabilities faced by both ecosystems.

The EU has a playbook to de-risk from China. Is it working? Brookings Institution
The European Union’s (EU) decision to raise its tariffs on Chinese electric vehicles (EVs) has prompted speculation about whether the EU and the United States could cooperatively “de-risk” from China. Much like the United States, the EU has developed a “de-risking” playbook with three goals: to protect its economy from outside encroachments, to promote its own competitiveness and resilience, and to partner with others to amplify its economy’s strengths and mitigate its vulnerabilities. In fact, the term “de-risking” was pioneered by European Commission President Ursula von der Leyen and later embraced by the Biden administration and all G7 leaders. But is it working?

China

China Decoupling Handbook: Where We Are, What To Do American Enterprise Institute/Derek Scissors
Scissors writes the case for a smaller US-China relationship keeps getting stronger, arguing that China under President Xi Jinping will not become a better partner. To achieve this decoupling, which is already underway, additional policies are needed around imports, exports (especially technology), inbound investment, outbound investment, and supply chains. In his “handbook,” Scissors details how best to carry out such policies in each area.
Why Catching Up to Starlink is a Priority for Beijing Carnegie Endowment for International Peace
China’s push to enter the satellite internet market shouldn’t come as a surprise. The Chinese Communist Party (CCP) has poured significant resources into closing the gap with America’s space-based technologies, and its efforts are starting to pay off. on August 9, a Long March 6A rocket blasted off from the Taiyuan Satellite Launch Center in the northern Chinese province of Shanxi. The rocket carried eighteen low-Earth orbit (LEO) satellites from the government-backed company Qianfan. State media hailed the launch as China’s answer to Starlink, the U.S.-based satellite internet pioneer, and the first step toward breaking America’s dominance in this market. Qianfan intends to grow its constellation to more than 600 satellites by the end of 2025 and to eventually place 14,000 satellites into orbit

U.S. Financial Regulatory Week Ahead