HeyJaredThe Two Cents
A space for musings on economic policy and political economy by Hanno Lustig and Romain Wacziarg
- Indexed issues, last 90 days
- 11
- Latest publication
- Sep 27, 2026
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- Earliest in this view
- Jul 6, 2026
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Nine Percent of GDP. (opens the original)
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When a new general purpose technology arrives (think railroads, electricity, the internet, etc), this is typically accompanied by a huge boom in infrastructure investment, as private investors start building the infrastructure that is needed to deploy this new technology. We are currently experiencing on of these GPT-fueled investment boom in the U.S. Total US AI-infrastructure investment was $1.15 trillion in 2025 and is projected to reach $1.43 trillion in 2026. According to my long-time co-au
Global bond markets. Marked to Market. Part I. (opens the original)
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In the aftermath of the Great Financial Crisis, long-term yields in advanced economies continued their decline to historically low levels. The secular decline in yields continued all the way until the COVID-19 pandemic of 2020. <img alt="" class="sizing-normal" heig
Whatever it takes was not free. (opens the original)
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The spread between the benchmark 10-year French (OAT) government bond and the German Bund is currently trading at 94 bps. The spread has roughly quadrupled from 20-25bp in early 2021 to a low-50s range through mid-2024, then jumped higher around the June 2024 snap-election announcement, oscillating 65-90bp through the political turmoil of 2024-25, and now spiking to 94bp.<a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/$s_!c20X!,f_auto,q_auto:good,fl_progres
What are U.S. Treasury markets really telling us? Part II. (opens the original)
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In one of his recent posts, Paul Krugman asked “What are bond markets telling us?” According to Krugman, there is no reason to panic in response to the steady rise in longer yields. Krugman cites the fact that long-run inflation breakevens, a measure of expected inflation constructed by subtracting the TIPS yield from the nominal Treasury yield with the same maturity, have been fairly stable over the past couple of years. The current 10-year TIPS breakeven is 2.32%, right on top of the SPF and C
From Core to Periphery. France in the Eurozone. (opens the original)
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A firestorm erupted on X when Matthieu Pigasse, a prominent former French banker, suggested that the French government ought to consider cancelling the national debt that is held by the ECB. That kicked off an interesting discussion about the income pooling arrangement within the Eurosystem.Thanks for reading The Two Cents! Subscribe for free to receive new posts and support my work.<input class="email-input
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