As the title suggests, I'm asking about the bubble that popped a few years ago with the default of giants like Evergrande.

I remember this being a hot topic but now not much comes out anymore.

Was it some exaggerated news or it ended quickly or is the situation worsening?

Thanks for reading and answering beforehand.

Source: https://www.axios.com/2026/07/22/health-insurance-costs-trap-millions-unwanted-jobs

In The General Theory of Employment, Interest and Money, Keynes wrote:

"Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally."

Alphabet just guided 2026 capex to $195–205B and reported negative quarterly free cash flow for the first time as a public company. Microsoft, Amazon, Meta, and Oracle are all committed to comparable multi-year buildouts. The consensus is near-total among firms facing near-identical incentives, which makes me wary of reading unanimity as independent confirmation.

The historical patterns I keep reaching for are:

• The 19th-century US railroads
• 1998–2001 fiber optic buildout

Both generated enormous consumer surplus while wiping out most of the capital that financed them.

My questions:

1. Is there a formal literature on the wedge between social and private returns in infrastructure booms? What conditions predict it? Non-excludability, low marginal cost of capacity, commoditization, coordination failure among competing builders? Is the railroad/fiber pattern actually the norm for general-purpose infrastructure, or am I just mentally defaulting to two famous cases?
2. Does asset durability change the analysis? Rails lasted 40+ years; dark fiber lit up profitably a decade later. Overbuilding left a durable gift to the next cohort. GPUs depreciate on a 3–6 year schedule. If the perishable component is the majority of spend, does the "overbuilding still leaves useful capital stock" mechanism weaken substantially, or does the survival of the infrastructure negate the churn?
3. What's the transmission mechanism if this cycle turns? Railroad busts propagated through leveraged bonds and bank failures. The fiber bust was largely equity and telecom debt, and the real-economy damage was more contained than the market damage. This cycle began self-funded from operating cash flow, but debt issuance is rising quickly. Does the funding mix determine whether a capex contraction is a stock market event or a macro event?

I'm not asking anyone to forecast a crash. I'm asking what analytical framework a trained economist would apply, what the relevant literature is, and what the plausible range of macro outcomes looks like if capex of this magnitude decelerates.

The common complaints raised by NIMBYs, i.e. residents who oppose development in their neighborhoods, seem to revolve around negative externalities.

For instance, a new tall apartment building being built in the middle of a single-family neighborhood can block or interfere with homeowners' views, create shade over their property, bring crime, bring traffic, higher infrastructure costs, increase strain in local hospitals/clinics, and lower their property value. All of these are technically social costs borne by third parties caused by the private transaction of a plot of land to a different owner and their subsequent construction of the apartment building, i.e. negative externalities.

NIMBYs do not want to suffer these costs, as any sufferer of negative externalities rationally does not want, and because there is presumably no solution to avoid these external costs except by having the apartment blocked, the only solution they rationally see is to block the development.

If one has an interest to prevent negative externalities and their imposed costs on uninvolved third parties, wouldn't this suggest they have an interest alignment with NIMBYs in blocking these developments? Or does the single-family low-density housing favored by NIMBYs create its own negative externalities, like requiring increased travel distance, gas consumption, air pollution, higher taxes, increased allergic reactions, increased heat, etc. for people not from the neighborhood? If so, then that suggests that there are negative externalities with whichever development pattern we choose. What does economics say at this point what approach is more minimizing of negative externalities?

It is a hypothetical question but assuming the war with Russia ends today how can Ukraine rebuild itself and what are the challenges ahead?

So I've been thinking about the problem of extremely wealthy people not paying taxes due to the difficulties involved in taxing capital gains. We certainly don't want people who build massive companies forced to sell off their controlling stock in that company just to pay taxes, but the current system where billionaires and trillionaires pay nearly 0% taxes is also inherently unfair to ordinary Americans who pay as much as 50% taxes.

So here's my proposal: A 90% estate tax on anything over a million dollars, BUT any taxes you paid during your life can be counted as a deductible.

This means that if you built up a nice estate for your kids by working hard as a doctor or lawyer, paid millions of dollars of taxes over the course of your career, whatever you saved up would not be taxed because your heirs could request your tax history and have that deducted from what you owe. This would solve one of the most common complaints about estate taxes, the idea that you are being taxed twice.

However, if you spent your life avoiding paying taxes, your estate would be heavily taxed on death. This would probably mean the inheritors of massive companies would not be able to keep control of their companies as they would have to sell stock, but there is historically very little benefit to having a 2nd-gen CEO running their parents' companies. This wouldn't put people in the poorhouse, but it would considerably reduce generational wealth.

So my question is: Would this idea work? Why or why not?

We're hearing a lot about wealth taxes and things at the moment here in the UK, which i expect would be difficult to enforce or at least lead to the very-wealthy just finding new methods of avoidance.. but haven't heard anyone suggest a higher sales tax on very expensive items (e.g. things that cost over $50,000 ? )

No doubt there are plenty of reasons why that wouldn't work (I can think of some), but sorta seems more fair in a way, so interested to hear the economic reasons why it doesn't seem to be part of the conversation. (Maybe ive just missed it?)

Title. And did anyone expect the stagnation, slow growth, on-and-off periods of recession/contraction, and deflation to persist? Also, what are Japan’s economic prospects for the future?

Hi all!
I'm a fairly new enjoyer of economics (I'm planning on choosing it for A-Levels after the school holidays) and I was wondering if there's any (somewhat) simple way to learn different economic theories (with hopefully more simple words too 😭 )?
Any suggestions greatly appreciated!!

Hi! Seeking out some of your economics takes on the following:

I am unable to understand why the leaders of the frontier AI labs preach AI as being a provider of abundance for humanity.

We have enough food in the world today, we have enough clothes and enough homes - yet people are dying of starvation, of cold weather without proper clothing and unhoused on the streets.

The US currently has more than 10x the number of empty homes as it does homeless people. The underprivileged are not poor because of a lack of resource abundance on earth - they are poor because of a misallocation of resources and a growing concentration of wealth.

When AI does bring abundance and near zero cost goods and services, the gains will still go to whoever owns the models and data centers - the average human will not own these companies.

Like many technologies in the past, they shift income from labor to capital. I cannot wrap my head around why AI will not be an extreme version of just that. The economic future of AI is, as I see it, a significant shift of resources towards capital owners as labor no longer retains relevance. The political reality of this is more extreme lobbying and the diminishing value of the average voter’s vote.

I welcome your perspective if I have misunderstood or misstated anything! I also understand that this question may have built in biases, please feel free to point those out as I hope to expand my understanding of this topic.

The exponential growth of wealth accumulating at the top of the pyramid is mostly based on stock and other intangible asset valuations. If a wealth tax on billionaires were implemented, large amounts of their asset would have to be liquidated, potentially in a short timeframe. Would the values of those assets collapse if they were all on the market at once?

If a job was able to adequately provide for an employee and their family, wouldn't that negate the need for food stamps, especially with their maximum earnings cutoff?