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This edition was written by Sarah Ahmad, Alex Conner, Georgia Nabors, and David Wessel.
Can generative artificial intelligence (AI) serve as an effective teammate for workers? Fabrizio Dell’Acqua of Harvard Business School and co-authors conducted an experiment at a day-long product development workshop including 776 Procter & Gamble employees. Participants were instructed to develop a new business solution and assigned to one of four scenarios: (1) an individual working without generative AI, (2) a team of two working without AI, (3) an individual working with AI, (4) and a team of two working with AI. They found that individuals using AI produced solutions similar in quality to two-person teams, suggesting that AI functions comparably to a human teammate in collaborative settings. Further, they found that individuals working without AI defaulted to their area of expertise– commercial professionals produced commercial solutions and R&D professionals produced technical ones. However, individuals using AI created more balanced solutions– similar to cross-functional teams– suggesting that AI allows users to operate outside their core expertise. Lastly, employees working alone and using AI reported more positive emotions than those working alone without AI and comparable to those working in teams. The authors conclude that AI can effectively replicate the benefits of human collaboration.
Larger, more expensive cities attract a disproportionate share of high-skill workers. Cécile Gaubert of the University of California, Berkeley, and Frédéric Robert-Nicoud of the Geneva School of Economics and Management show that this pattern can be explained, in part, by the fact that higher-income households spend a smaller share of income on housing. This makes them more willing to pay for the amenities and productivity advantages of expensive cities, contributing to endogenous spatial sorting by income. Accounting for income-dependent housing expenditure shares, they find that welfare inequality rose by about 30% from 1980 to 2020—a larger increase than suggested by earlier work that assumed constant housing shares across income levels. Although fewer low-income workers live in expensive cities, those who do face a disproportionate cost burden, amplifying real inequality.
Francis Dillon, Edward Glaeser, and William Kerr of Harvard find that segregation by educational level in American workplaces has risen over the past two decades. They find that the dissimilarity index—the share of non-college workers that would need to shift establishments to create an even educational distribution—increased from 51.9% to 55.0% between 2000 and 2020; by comparison, a comparable index of racial segregation was 53% in a typical large metro area in 2020. While the overall workforce has become more educated, non-college workers are increasingly concentrated in workplaces with fewer college-educated peers. This trend is more pronounced among younger and male workers and is growing the fastest in service-producing industries, where firms are more likely to outsource operations typically performed by non-college educated workers. This growing isolation may limit opportunities for workers without college degrees to learn skills from their college-educated peers, potentially affecting their future earnings.
"... [T]he reserve function of the dollar has caused persistent currency distortions and contributed, along with other countries’ unfair barriers to trade, to unsustainable trade deficits. These trade deficits have decimated our manufacturing sector and many working-class families and their communities, to facilitate non-Americans trading with each other."
"...That trade entails savings housed in dollar securities, often [Treasuries]. As a result of all this, Americans have been paying for peace and prosperity not just for themselves, but for non-Americans too."
"... Reserve status matters and, because demand for the dollar has been insatiable, it has been too strong for international flows to balance, even over five decades."
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