Has the European turnaround finally arrived?
Europe just had its best reporting season in years. Companies in the benchmark Stoxx Europe 600 index boosted earnings per share by 18% on average in the second quarter compared with a year earlier. Earnings barely grew at all in 2025 and 2024 as the strongest companies in the index were offset by weaker players.
Growth is now widening beyond a narrow group of AI and bank stocks, according to Gerry Fowler, who leads the European equity strategy team at UBS. Government spending and private investment in priorities like infrastructure, energy security and defense are creating real opportunities.
The Stoxx Europe 600 is up 10% so far this year, a bit less than the S&P 500’s 12% gain. European stocks have underperformed the U.S. since the mid-2000s, but the gap has narrowed lately.
Here is more from the WSJ.
Saturday assorted links
1. New publication analyzing AI constitutions.
2. Niall Ferguson vs. Iain Banks, and against some other stufff too (TFP).
3. NYT obituary for Victor Niederhoffer.
5. Flypaper effect for AI safety work? A bit unfair, but not altogether wrong either. Always ponder the possible secondary consequences!
The End of Friday Nights with Friends
This study examines how Americans’ time with friends has changed over the week, focusing not on how much social interaction has declined but on when it has. Using American Time Use Survey data from 2003 to 2024 (N = 243,095), I map hourly patterns of “friend time” across the days of the week. In the early 2000s, social life followed a clear weekly rhythm: Modest weekday interaction built toward pronounced peaks on Friday and Saturday nights. Since the mid-2010s, that rhythm has collapsed. Friday night, once a central site of social activity, now looks like a typical weeknight. Saturday remains elevated but less so than before. Overall, time with friends has fallen by more than half. The mix of social activities, however, has remained stable. Americans have not replaced one form of interaction with another; they have reduced social interaction across the board. These findings point to a temporal reorganization of social life marked by the disappearance of the “night out.”
That is by Neal Caren, via the excellent Kevin Lewis. So what did you go last evening?
What should I ask Annie Lowrey?
Yes I will be doing a Conversation with her. She has a new and very interesting book coming out, namely The Time Tax: How the Government Wastes Our Time―and How to Fix It. More generally, from Wikipedia:
Annie M. Lowrey…is an American journalist who writes on politics and economic policy for The Atlantic. Previously, Lowrey covered economic policy for The New York Times and prior to that was the Moneybox columnist for Slate. She was also a staff writer for the Washington Independent and was on the editorial staffs of Foreign Policy and The New Yorker. She is a proponent of universal basic income.
So what should I ask her?
This brew, at least, is from Ashburn, Virginia
Friday assorted links
1. Profile of Julian Gough and his evolutionary cosmology. And the Substack version.
2. New Spanish-language edition of Bioy Casares on Borges coming out. The older edition was, among other things, too heavy to lug around or bring on a trip.
3. The market for data is the market of the future.
4. If Uzbekistan were excluded, the damages would look similar to earlier work.
5. James Broughel on capitalizing AI agents. And more on the same.
Breaking Ground: Can Refund Bonuses Solve the Holdout Problem?
My latest paper (with Cason and Zubrickas) has just been published by the Journal of Urban Economics. We show that refund bonuses can indeed improve the holdout problem.
Abstract: The holdout problem presents a pervasive challenge in situations that require the assembly of independently controlled assets, where due to complementarity the combined whole is worth more than the sum of its parts. One avenue for addressing holdout problems involves contingent contracts, where agreements are conditional upon reaching a predetermined threshold. This paper reports an experiment to investigate a new refund bonus contingent mechanism, in which asset owners who agree to participate (e.g., sell their asset) receive a bonus payment if the required threshold for project success is not met. The refund bonus eliminates failure equilibria and improves the frequency of successfully reaching the threshold in the symmetric mixed strategy equilibrium. In the experiment, individual asset holders choose each round whether to accept an offer to sell. Multiple owners must accept for the (contingent) sale to materialize, and holdout owners who do not sell can earn more, so the game has the strategic incentives of a volunteer’s dilemma. The data show that the bonus mechanism increases agreements to sell, the frequency of successful projects, and efficiency. By the second half of the experimental sessions, the total number of sales is 35 percent higher and the threshold is met nearly twice as often with the bonus than without.
I also cover this paper in my Refund Bonus (aka Dominant Assurance Contract) Explainer.
Rick Rubin podcasts with me
Two hours, thirty-four minutes, Rick and I recorded this session not too long ago in Tuscany. It was everything Rick wanted to ask. Self-recommending of course, and there is more to come.
Green shoots for the UK?
Early signs of tech-driven improvements in productivity growth could herald a sustained strengthening in the UK’s economic outlook, analysts have said, in a turnaround after years of underperformance. Private sector productivity grew by 1.8 per cent in the second quarter compared with a year earlier, up from 1.2 per cent previously, according to analysis of official data by investment bank Morgan Stanley.
The rise extended gains since 2024 and reduced the growth gap with the US. The reasons behind the upsurge are heavily contested, but some analysts point to increasing AI adoption in sectors including information technology and business services.
If the recent productivity acceleration can be sustained over years, it could bolster incomes and help alleviate some of the strains on Britain’s public finances.
More evidence on the effects of recent tariffs
Trump is giving economists something to write papers about:
U.S. tariff rates in 2025 rose to levels not seen since the Great Depression, yet imports increased. To account for the missing trade collapse, we develop an open-economy New Keynesian model with tariff heterogeneity, inventories, and shocks to investment that capture the AI-driven boom. The model matches the untargeted paths of imports, output, and inflation; we use it to decompose the effects of tariffs and the investment boom. Absent the investment boom, imports would have fallen by 10 percent and activity would have contracted by 0.7 percent. The effects of tariffs depend on which goods are tariffed: tariffs on consumption and intermediates act like shocks to supply; tariffs on capital goods act like shocks to demand. The concentration of the 2025 tariff increases on consumption goods and the relative sparing of capital goods limited the damage to output while amplifying the inflationary impulse.
That is from a new NBER working paper by .
Indian documentary covers EV winners
A new short documentary (22 mins) film called The 22nd Century Indian by Shaurya Sinha offers an optimistic take on India, and also covers five (!) Emergent Ventures winners. Congratulations to them, and to Shruti too.
EV India winners featured: Naman Pushp https://x.com/therealnamzoo?s=11
Khushi Mittal: https://khushimittal.com
Shreeporna Rao: https://x.com/shreepoorna365?s=11
Samay Sanghvi: https://www.thealmanac.ai/article/samaysanghvii
Angad Daryani: https://www.linkedin.com/in/angaddaryani?utm_source=share_via&utm_content=profile&utm_medium=member_ios
Thursday assorted links
1. This guy is productive. Yes very productive.
2. “Mercor is building a network of experienced data scientists for potential future projects with leading AI research organizations.” And The New Statesman covers the poetry project.
3. How did the English build such beautiful villages?
4. Two Percent Podcast with Tyler Cowen, fifty-two minutes, we discuss “wellness” too.
5. New Fighting Crime podcast.
6. Does New York need new ornamental architecture?
7. Texas Tech update (NYT).
There are now eight episodes
The Everyday Abundance podcast explores the hidden histories behind everyday activities and the technologies we don’t even know are technologies.
Virginia Postrel and Charles C. Mann dive into the surprising stories behind everything from brushing your teeth to driving your car.
Listen, subscribe, and rate us on Spotify, Apple Podcasts, Amazon, YouTube, or wherever you listen to podcasts.
Here is the link, self-recommending of course…
Did UBI make people happier?
Eh, only in the short run:
We study the causal impacts of income on a rich array of employment outcomes, leveraging an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month unconditionally for three years, with a control group of 2,000 participants receiving $50/month. We gather detailed survey data, administrative records, and data from a mobile phone app. The transfer caused total individual income excluding the transfers to fall by about $1,900/year relative to the control group and a 4.2 percentage point decrease in labor market participation. Participants reduced their work hours as a result of the transfers by 1-2 hours/week and participants’ partners reduced their work hours by a comparable amount. Among other categories of time use, the greatest increase generated by the transfer was in time spent on leisure. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. Treated participants broadly increase expenditures, led by spending on non-durable goods and services, with smaller increases in spending on durable goods and human capital. We observe no significant effects on degree attainment, though the magnitudes of the estimated effects generally appear larger among younger participants. Measures of subjective well-being are higher among treated participants in the first year of the transfers but then revert to control group levels. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
That is from the QJE by Eva Vivalt, Elizabeth Rhodes, Alexander Bartik, David Broockman, Patrick Krause, and Sarah Miller. Via Matt Yglesias.
My excellent Conversation with Luke Burgis
Here is the audio, video, and transcript. Here is the episode summary:
Luke Burgis left Wall Street after two years, founded a few successful companies in his twenties, then walked away to spend three years in a Roman seminary on the path to the priesthood. He now runs the Cluny Institute and teaches at Catholic University. His book Wanting made René Girard legible to a general audience; the new one, The One and the Ninety-Nine, takes mimetic theory into the dynamics of self and crowd in an age of social contagion.
He joined Tyler to discuss whether the age of pessimism is ending, why the Anglo world in particular seems so unhappy, whether Dostoevsky or Thomas Mann better diagnoses modernity, the kind of reader his own book would ruin, why he thinks AI will make social contagion weaker, what put him off consulting with Anthropic on Claude’s constitution, what effective altruism misses, why men and women are drifting apart, what he’d fund in every American city, the case for reintroducing friction, whether a Gnostic reading of the lost sheep explains our moment, what Rod Dreher gets right about withdrawal, why Genoa is Italy’s most underrated city, what confession times reveal about a church, why Italians seem tired of their Catholicism, why he didn’t become a priest, where he differs from Ross Douthat, why exorcists appear to be on the rise, the sudden mimetic antisemitism on the right, the book his 23-year-old self would have hated, what he secretly admires about Silicon Valley, why Michigan never left him, what the original Cluny can teach a modern talent network, how he hopes to face his own death, what he’ll do next, and more.
Excerpt:
COWEN: I’m not saying you’ll ever do it, but what does your escape fantasy look like? One of mine is I’ll go live in a third-tier city in Mexico. I’m not going to do it, but sometimes I think about it. Cost of living would be very low. The food would be amazing. I could improve my Spanish.
BURGIS: It is moving to Genoa with my family, making my US income, living in Italy. I love Italy. I love the food. I love the people. I love the culture. I feel lighter while I’m there. I laugh more. We eat dinner later. I love everything about it. It would probably be living in Italy for the most part, or at least making that my home base, brushing up on my Italian, working less.
COWEN: Why Genoa? It’s a wonderful city. It’s still medieval, right, in a funny way?
BURGIS: It’s medieval. I think it’s the most underrated city in Italy.
COWEN: In Italy, I mean, yes. I agree. Yes.
BURGIS: I think it’s the most underrated city. You agree.
COWEN: I took my wife there. She was stunned. “How come no one goes to Genoa?” She was telling me.
BURGIS: It’s close to Cinque Terre. It’s this city that’s elevated. It has a fascinating history. It was still a very functional port city. It was really the most important city in Italy, arguably the world, during when Spain was a great power. It’s very cosmopolitan. It reminds me of Marseille a little bit. It’s vertical, breathtaking views. The people there, they’re not very touristy. The Italians there seem indifferent to you as a tourist.
It just feels very, very homey. It’s so close to a lot of other great things in Italy. You can get to Torino relatively easily. That whole area up there, Bra, where the Slow Food movement originated, you’re just in striking distance from everything. Nobody I know that goes to Italy goes to Genoa. I plead with them. I’m like, “Please, just go to Genoa.”
COWEN: I am the exception. My wife sometimes talks of wanting to live in the smaller towns nearby, which we’re not going to do because we’re slated for a third-tier city in Mexico, but we’re not going to do that either. I sometimes think of Northern Italy as a place where there were fewer different dimensions for mimetic desire. That is, more people dress the same. There are fewer status dimensions, maybe less room for eccentrics compared to America. Do you think that’s true, or do you think I’m off base? Paris is a bit like this also. There’s a certain notion of what kind of shoes an Italian man should wear. They wear them, and they’re amazing, and actually more affordable than here. There’s a sameness to some things.
Recommended, and do note Luke’s new book The One and the Ninety-Nine: Forging Identity in an Age of Social Contagion.