In 2020 Anja Roth and Michaela Slotwinski used a Swiss data set combining survey and administrative information for the same individual and their partner. They found that individuals misreport incomes in surveys, that this misreporting is consistent with the male breadwinner norm and that it essentially explains the observed discontinuity in reported earnings. In a recent paper that I co-authored using Dutch tax data, we similarly failed to find any evidence of the 50% threshold. It is probable that gender norms can motivate spouses to marginally misreport their actual incomes, but the economic consequences of a reporting bias are quite different from those of actual economic decisions. More important, Claudia Goldin has repeatedly shown that gender differences in wages and incomes often reflect subtle differences in occupational choices. For instance, women are more likely to opt for the flexible job that allows for child-care pick-ups, sick days and household management, whereas men are more likely to go for the “greedy” jobs. Exclusively interpreting this tendency as the outcome of deeply entrenched gender norms is too simplistic, if only because such specialisation may, in some circumstances, be efficient for the household under consideration, particularly in the presence of children. What is needed is a deeper understanding of the technology of human- capital acquisition by young children. For example, are a mother’s and a father’s times perfect substitutes, imperfect substitutes, or complements? This is a very active area of current research, involving economists and developmental psychologists. In basically all developed countries, and in a significant number of middle- or even low-income ones, women are now more educated than men. This crucially important change remains largely underdiscussed, despite its potentially major consequences. In the end, the scarcity of female breadwinners may progressively wane, but much is still to be learned about this process. Pierre-André ChiapporiProfessor of economicsColumbia UniversityNew York
It is indeed better to plan for an urban future in Africa than react after the fact (“Sprawl for all”, July 4th). Planning infrastructure pays for itself. Your piece shows that basic street plans raised land values in Dar es Salaam’s suburbs, but that the gains flowed to grey-market speculators and the well- connected. Half of urban Africa’s footprint in 2050 is not yet built, so the value its future roads and pipes will create has not yet been pocketed. African cities now collect around $8 a head in property tax, against $220 worldwide. Capture just a part of that gain and the urbanisation that connects people to productive jobs can start to finance itself. With the world’s largest surge in working-age people ahead, few fiscal reforms would do more for Africa’s growth. Mark HenstridgeChief executive officerOxford Policy ManagementOxford Rosa Parks is rightly celebrated for refusing to give up her seat to a white person on a bus in Montgomery, Alabama, thus sparking the civil-rights movement (America at 250). That was on December 1st 1955. Several black people had been arrested before Parks during 1955 for doing the same thing, notably 15-year-old Claudette Colvin, who was arrested on March 2nd. In 1956, Colvin was one of the four plaintiffs in Browder v Gayle, a federal lawsuit that ended segregation not only on Montgomery’s buses, but also on public transport throughout America. After that she was mostly forgotten. Her courageous act in part inspired Montgomery’s black community to protest against segregation laws, though it was the arrest of Parks that sparked a boycott of the city’s transport system that lasted over a year. Strikingly, part of the reason for Colvin’s disappearance from the history of the civil-rights movement lay with the black community at the time. Black residents considered the young Colvin a troublemaker and local activists found Parks to be a more suitable person to rally round. By Colvin’s own account she thought she was too dark-skinned and too poor to win the crucial support of Montgomery’s black middle class. She also became pregnant out of wedlock during the year, which didn’t help. Colvin died in January this year.
Magaly Rodríguez GarcíaAssociate professorKU LeuvenLeuven, Belgium I read your great obituary of Humphrey Smith, the owner of the “proudly independent Samuel Smith Old Brewery” in Tadcaster, North Yorkshire (July 18th). His strictly enforced restrictions on the use of mobile technology at his pubs (“no mobile phones except outside, no laptops or tablets”) and a music-free environment (“no Muzak either, just the buzz of conversation”) created uniquely sociable surroundings. Sadly, in recent years the rules in London have been relaxed and phones and even laptops are now common in Samuel Smith’s pubs, even in Ye Olde Cheshire Cheese. Often it is only the sound of young city types chatting away on telecoms that interrupts the doom scrolling. Mr Smith will be turning in his Yorkshire grave. CHRIS DRAKELeicester When Sir Francis Galton famously asked people to guess the weight of an ox at a fair in Plymouth in 1906, he did not offer the participants the option of giving him money in order to enter 99 additional guesses and skew the average. But this is in effect how current prediction markets work, and is also why they don’t work (“Fixing the truth machine”, July 25th).
Bob FisherHouston I can confirm that software designed to detect AI-generated text are indeed “black-box algorithms that can give false positives” (“Paper trails”, August 1st). I ran some texts through an AI detector. Samuel Beckett’s “Krapp’s Last Tape” and “Happy Days” were judged likely to be 86% and 84% AI-generated. The Sermon on the Mount was thought to be 100% AI-generated. The programme judged a speech by Donald Trump to be 100% human-generated. Brendan LyonsDublin This article was downloaded by zlibrary from https://www.economist.com/letters/2026/08/06/letters-to-the-editor
The new era of finance needs innovation more than consensus FIFA needs a constitution for the commercial age
The new era of finance needs innovation more than consensus America won’t import regulatory fashions that hold markets back, writes Michael Selig Aug 6th 2026 ThE GLOBAL derivatives market has entered a new era, and the United States is leading it. For decades, derivatives—financial contracts such as futures, options and swaps, whose value is based on the price or performance of an underlying asset—have served as a tool for businesses, farmers, investors and financial institutions to manage risk and allocate capital efficiently. What was once a niche financial tool now underpins a market with over $1.2 quadrillion (million billion) in notional value. Nearly half of that market falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC), which I have led since December.
American leadership in derivatives was built over generations through competitive markets, strong institutions, sound regulation and a willingness to embrace innovation. In many market segments, gone are the days of traders shouting in pits in New York and Chicago, or even the screen-based trading of the 2000s. Derivatives markets have evolved into increasingly autonomous ecosystems driven by automated trading, artificial intelligence, algorithmic execution and real-time decision-making, reacting to information thousands of times faster than any human could. For many years, international financial regulation has operated under an assumption that regulatory priorities would emerge through broad consensus among global institutions and regulators from different countries. Although international co-operation remains important, America is not in the business of importing regulatory trends designed by agencies that are considering yesterday’s markets built around limited trading hours, single exchanges and screen-based trading. Instead, America is once again a hub of financial innovation. During President Donald Trump’s first term, the launch and expansion of CFTC- regulated bitcoin futures helped bring crypto assets into mainstream finance by providing institutional investors with transparent, regulated exposure to such assets. That foundation transformed bitcoin from a fringe asset into one increasingly integrated within the broader financial system: bitcoin exchange-traded products now hold over 1.2m bitcoins, compared with essentially none in 2016. During Mr Trump’s second term the CFTC has approved the first “true” bitcoin perpetual contract as a futures contract. A perpetual, or “perp”, is a derivative contract with no fixed expiry date, instead relying on a periodic funding rate mechanism—a payment between traders—designed to maintain relative price parity with the underlying asset’s spot price. Now the CFTC is helping extend the foundations laid in crypto markets to the broader financial system as capital markets enter the digital age. Congress recently passed legislation creating the first comprehensive federal framework for dollar-backed stablecoins usable for payments, and laying the foundation for broader integration of crypto assets into the financial system. The CFTC is exploring how regulated stablecoins can be used as collateral,
modernising market infrastructure while maintaining the safety and integrity that have made American derivatives markets world-leading. Our innovation extends well beyond crypto assets. This year we launched America’s first major exchange offering round-the-clock trading for gold futures. The CFTC is also engaging with market participants in the potential development of perpetual futures for non-crypto assets. At the same time, prediction markets, which exclusively fall under the Commission’s jurisdiction, have shown their value as a powerful tool for price discovery. Whereas America is embracing responsible innovation, many of our international counterparts are moving in the opposite direction. Recently, nine European financial regulators argued that the event contracts traded on prediction markets should be treated as gambling rather than financial instruments. That view misunderstands how these contracts are structured and underappreciates the fact that they are traded on marketplaces and not wagers placed with a “house”. It also ignores the role these markets play in aggregating information, improving forecasting and enhancing price discovery. Prediction markets often outperform traditional polls and experts —they alone correctly forecast Mr Trump’s electoral victory against Kamala Harris in 2024. Research from the Federal Reserve shows that prediction markets perform as well as or better than traditional estimates for economic indicators like the Fed Funds rate and consumer-price index. To remain effective, global regulatory frameworks must evolve as quickly as the markets they oversee. History has shown that American leadership has been strongest when we have embraced innovation early, from the railroads and aviation to the internet and electronic trading, shaping global standards rather than waiting for others to do so. That philosophy extends to our international regulatory relationships. Cross-border co-operation remains valuable, but access to the world’s deepest and most trusted derivatives markets is a privilege. International agreements, Foreign Board of Trade registrations and supervisory arrangements should be regularly modernised to reflect evolving market structures and technology advances, while furthering the interests of American markets and protecting market participants.