Economist. Part time farmer. Amateur boxer. Occasional author. Egotist. Advocate of economics without jargon. Inflation, environmental economics, the economics of prejudice, structural change.
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Paul Donovan
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Assault and batteries
The Gulf war is incentivizing investment in renewable energy. Part of that is making better use of the solar panels already in existence.
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Trade time
Trade data likely suggests that charging US consumer tariffs has done little to alter their appetite for imported goods.
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Inflation bonanza
The political and policy consequences of US inflation are probably more important than any demand destruction
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Carrying on, without keeping calm
The ECB policy error was expected, and a weak justification was offered. A further unnecessary rate hike is possible.
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How bad is the ECB error?
The ECB is almost certain to commit policy error today. However, the damage from the unnecessary rate increase should be limited.
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Market moves more than economic shifts
Markets are moving on perceptions of risk—changes in perceptions of the economic outlook are more muted.
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They're back
US President Trump is proposing more tariffs. This round will probably have less of an inflation impact than last year’s tariffs.
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Why work matters
The “no fire” element of the US labor market is important in keeping fear in check, allowing consumers to use savings to pay higher prices.
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Does AI need DEI?
Capturing profit from a diverse and inclusive workforce may require a company to change the way it does business. The same can be said for AI.
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War and trade war costs
US President Trump attempted to counter the costs of the war policy by reducing costs associated with the trade war.
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One expected consequence of the Gulf war is an acceleration of renewable energy investment. Renewables generate energy security, not just at a national level but for the individual. In a world where h...
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China’s May exports were stronger than expected, with the seemingly insatiable demand of companies wanting to play with the nice shiny new toy of AI. Export data to the US was flattered by comparison ...
May US headline consumer price inflation is expected to rise as the price of the Iran war is being passed through relatively quickly to consumers. A supply shock might have a delayed effect (with prof...
The expected error from the ECB was accompanied by rhetoric citing concerns about oil price pressures broadening throughout the Eurozone economy. There is no evidence of this reported broadening—non-o...
The ECB is almost certain to commit a policy mistake today. Raising rates will not change Eurozone inflation or inflation expectations. This policy is stuck in an unhelpful 2022 mindset. Consumers wil...
Bond and equity markets have weakened in Asian trading. There seems to be no single cause, rather a general sense of increasing risk. Economically, the drop in equities is not that significant—in theo...
US President Trump is proposing new tariffs—an additional 10% for US consumers of goods from most major economies. Someone in the administration seems to be aware that tariffing high frequency purchas...
The US employment report adds a rather unreliable narrative to the US labor market data. Expectations are for a dull report, with an unchanged unemployment rate and a sub-100,000 non-farm payrolls num...
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As with any new technology, how AI is used will determine its value. That emphasizes the importance of people as users and suggests three ways corporate diversity, equity, and inclusion can indicate p...
Another day, another round of Gulf war stories—the latest originated from semi-official Iranian sources, so markets took them more seriously. Iran’s apparent suspension of negotiations with the US pro...
