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The United States has an economic advantage that is the envy of the world. Inventors flock to the United States, like nowhere else.

Recent research on the immigration patterns of high-skilled workers (pdf), shows that, from 2000 to 2010, the US received over 190,000 inventors migrate to the US, while only a little over 10,000 left the country. The US received more inventors combined than every other country, and was one of only two countries in the study with a positive net migration.

Fosters Innovation: Patents give inventors the peace to expose their inventions to the world without fear of theft or duplication. This has assured an environment where creativity and innovations can thrive in plenty.

Fueling Economic Growth: Patents safeguard new inventions and therefore land as fuel for economic growth. They increase the investment of research and development money, resulting in new products and services that fuel economic progress.

IN 1970 the United States recognised the potential of crop science by broadening the scope of patents in agriculture. Patents are supposed to reward inventiveness, so that should have galvanised progress. Yet, despite providing extra protection, that change and a further broadening of the regime in the 1980s led neither to more private research into wheat nor to an increase in yields. Overall, the productivity of American agriculture continued its gentle upward climb, much as it had before.

In other industries, too, stronger patent systems seem not to lead to more innovation (see article). That alone would be disappointing, but the evidence suggests something far worse.

A “patent thicket” describes a web of patents filed on a single existing product to create barriers to competition and extend effective patent life. The US Patent and Trademark office (USPTO) grants patents on new and novel inventions, for example the active ingredient of lifesaving drug – this is known as the “parent patent.”

Pharma companies build patent thickets by making small changes to a parent patent and subsequently applying for “off-spring patents.” USPTO may reject some off-spring patent applications because they have been deemed not different enough or not “patentably distinct” from the parent patent.

Skyrocketing prescription drug prices remain a pressing political issue. Polls show that a large majority of voters in both parties support efforts to reduce drug prices, and President Joe Biden’s reelection campaign highlights his administration’s efforts to do so under the Inflation Reduction Act.

A major factor driving higher drug costs is the patent system, which grants pharmaceutical manufacturers a 20-year exclusive right to “make, use, sell, and import” their products. Although the government originally established the patent system to “promote the Progress of Science and useful Arts,” many patents are now deployed to protect and extend monopoly power. In the case of pharmaceuticals, complex patent strategies are regularly implemented to keep competitors and low-cost generics out of the market for as long as possible to maximize the profits of blockbuster drugs. Given this ongoing misuse of the patent system, any proposed changes to patent policy must be evaluated carefully to ensure that they deter, rather than reinforce, such practices.

Negative innovation causes real harms. Ibrutinib is a case study of the risks that resulted from the ability of Pharmacyclics to game the patenting and drug approval processes. The costs and health consequences are borne by payers (including large self-insured corporations) and cancer patients, who are subjected to a patent-protected dosing method far in excess of what is required to obtain the desired therapeutic effects—a point that the FDA noted in its initial 2013 review—which may also result in unnecessary cardiovascular toxicities9. If we want to prevent repetition, we need to mandate greater coordination between the FDA and USPTO, create robust incentives (including severe penalties) discouraging drug companies from engaging in such conduct, and fix the regulations that allowed and potentially encouraged this outcome.

Of course, all of our proposals involve difficult and complicated issues of implementation. However, if we want to prevent future negative innovation and the associated harms to patients, we need to make some changes. Promoting the progress of Science and useful Arts—the Constitutional purpose of the patent system—demands nothing less.

Many of the Change Respondents—AAFA, ABAIPL, the Automotive Anti-Counterfeiting Council (A2C2), the Footwear Distributors & Retail Association (FDRA), GBOC, Toy Association, and the Transnational Alliance to Combat Illicit Trade (TRACIT)—believe that the current state of the law, which puts the onus on brand owners to find and report listings of counterfeit goods to e-commerce platforms, disproportionately burdens brand owners. These Change Respondents note that not only do e-commerce platforms have no affirmative duty to police their sites for counterfeit products, but there is inconsistency in platforms’ notice-and-takedown procedures.28 IACC states, “[t]he end result has been a wide disparity in the level of IP [intellectual property] protection across the online space, characterized by a patchwork set of rules, procedures, and evidence requirements that rights-holders must navigate to seek assistance in protecting their brands. As the Toy Association explains, “certain tools are only made available to brands that have registered for particular marketplace enforcement programs that may have onerous terms; some are only available at a cost to the brand owner; and some may only be available to accepted brands after application to the marketplace,” and, in addition, “they are not uniform across marketplaces.” Further, because the process is reactive, by the time a listing for a counterfeit product is removed, consumers may have already been exposed to (and purchased) the illicit goods. d. The law has not been able to keep pace with current technology. Multiple Change Respondents—AAFA, the Center for Anti-Counterfeiting and Product Protection (A-CAPP), FDRA, GBOC, and TRACIT—argue that e-commerce platform incentives to keep counterfeit listings off their sites (e.g., consumer trust and reputation) are outweighed by the incentives to maximize listings, and therefore profits.

Rather than frame the bill’s best practices in terms of “reasonable measures,” Congress should follow the simpler approach the U.S. Department of Homeland Security (DHS) took in 2020 when it set forth its own set of clear best practices. Dept. of Homeland Security, Combating Trafficking in Counterfeit and Pirated Goods: Report to the President of the United States (Jan. 24, 2020). Although DHS’s list of best practices is not perfect, they are set forth clearly without as much ambiguity, making them easier for e-commerce platforms and consumers to follow and to understand. Not only would such an approach make the SHOP SAFE Act more effective, it would minimize the litigation costs that platforms, trademark owners, and consumers would have to endure. Congress could protect consumers even more by applying the proposed provisions of the SHOP SAFE Act to all e-commerce platforms equally. Currently, the bill would not impose contributory trademark counterfeiting liability on platforms with less than $500,000 in annual sales unless these smaller platforms received 10 notices that a third party seller had sold counterfeit goods implicating health and safety. SHOP SAFE Act of 2023, § 2(a)(4)(D).

Take cooling, for example. It isn’t optional anymore. Last week, historic heat waves threatened the lives of more than 100 million Americans. According to the Center for Energy Poverty and Climate, the average price to cool a home will be $719 this summer, up 9 percent over last year.

Extreme weather raises food prices too. It’s one reason that orange juice cost 42 percent more in April than the year before. Because the U.S. imports about 15 percent of its foods, extreme weather elsewhere in the world affects food prices here. One study predicts that rising temperatures could increase food inflation by more than 3 percent annually in the next decade.

The biggest danger facing the American economy for years has been inflation. Now, another problem is emerging as a credible threat on the horizon: Unemployment. Just as inflation continues to cool, yellow lights are flashing in the still-strong jobs market. The Federal Reserve must now confront the risk that it’s making a mistake by keeping interest rates too high for too long. That’s why some economists are pleading with the Fed to ease up its inflation fight—before high interest rates, which it’s used to tame surging prices, grind the US economy into a recession. “It’s time to cut rates,” said Joe Brusuelas, chief economist at RSM. “Inflation is fading as the primary focus of concern. The balance of risks is slowly tipping towards higher unemployment.” Mark Zandi, chief economist at Moody’s Analytics, said the labor market is straining under the weight of high borrowing costs. “The biggest danger is a policy mistake: The Fed keeps rates too high for too long,” Zandi told CNN in a phone interview. “Right now, the Fed is signaling a September cut. I think that’s okay, but if they wait any longer than that, I fear they are going to overdo it.” Even Fed Chair Jerome Powell is acknowledging a significant shift in the risk calculus. “Elevated inflation is not the only risk we face,” Powell told lawmakers on Tuesday, pointing to easing inflation and “cooling” in the labor market.

Has the day of reckoning finally arrived? Wednesday’s rout in tech stocks led by Tesla and Google parent Alphabet wiped a collective $1 trillion in value off U.S. equities, signaling a broad-based correction could be in store.

Losses in the benchmark S&P 500 index and tech-heavy Nasdaq Composite endured their worst days since the fourth quarter of 2022.

CEOs of small and midsize companies are feeling less confident about the economy than they were earlier this year.1 The Vistage CEO Confidence Index stood at 83.3 for the second quarter, falling from 85.9 in the first quarter. The decline in confidence is partly a consequence of and elevated interest rates, Vistage said. To tamp down record inflation, the Federal Reserve has hiked rates from near-zero to more than 5% in the past two years. The majority of CEOs (64%) surveyed said that elevated were hitting their businesses. Despite this, 60% still expect increased revenue in the next 12 months. While inflation has cooled, from more than 9% in the summer of 2022 to 3% now, businesses are still feeling the effects of higher prices, whether it’s from costlier labor or raw materials expenses. Fifty-nine percent of respondents said the biggest source of inflation affecting their business was labor, 12% believed it was raw materials, 9% thought it was equipment, and 8% chalked it up to higher services costs. Although the CEOs said labor costs were up, many didn’t anticipate shrinking their company’s workforce. Only 10% thought that the total number of employees at their firm would decline in the next 12 months. When looking to the future, respondents were optimistic about and its potential to increase employee —nearly one-third of the CEOs in the Vistage survey said they were increasing their spending on AI. However, the majority of respondents (55%) said they were making no changes to their AI budget. For some CEOs, AI isn’t just a tool for the future. Some already are using it at their companies: 49% say they use it for sales and marketing, 33% for improved operations efficiency, and 23% for customer service. Vistage is an executive coaching company for small and midsized businesses that has measured the confidence of smaller-companies' top executives about the U.S. economy since 2003 with its quarterly CEO confidence index.

The Great Recession of 2008-2009 left its scars unhealed, and the Covid-19 economic downturn dealt the US one more blow. Concerns regarding the instability of the financial markets are now resurfacing. BCA Research, a Canadian investment research organisation, predicts volatility in the US stock market going forward. According to , in a note to clients last week, BCA Research chief global strategist Peter Berezin warned that, contrary to popular belief, the economy will fall into a recession either this year or in early 2025. Should that happen, the S&P 500 could tumble to 3,750, which marks a 30% drop from current levels. Berezin's prediction hinges on the belief that the labour market will slow notably in the coming months, which will weigh heavily on consumer spending, a major driver of economic growth. The relationship between inflation and unemployment is measured by something called the "Phillips curve." "The reason the U.S. avoided a recession in 2022 and 2023 was because the economy was operating along the steep side of the Phillips curve," he wrote. "When the labour supply curve is nearly vertical, weaker labour demand will mainly lead to lower wage growth and falling job openings. In other words, an immaculate disinflation." Berezin also predicts broad economic challenges, including notable slowdowns in growth in China and Europe. This could contribute to the weakening of the global economy and increase pressure on international stock markets. The Dow Jones Industrial Average broke through 40,000 for the first time in mid-May, setting a new record high. It has now dropped from those peaks, though. This prediction, which might rank among the most pessimistic on Wall Street, comes after a turbulent year for the market.

But economists say the pickup in economic growth, and consumer spending in particular, isn’t expected to last long term. Many lower- and middle-income families are struggling to cover basics, and more people are falling behind on loan payments. The rapid recovery since the onset of the pandemic has recently lost steam, as high borrowing costs force households and businesses to rethink spending. Home sales have stalled, manufacturing is slowing, and factories are seeing a drop-off in demand for U.S.-made goods. Meanwhile, the unemployment rate — at 4.1 percent as of June — has edged up for three straight months.

Stubbornly high inflation has been showing signs of abating in recent months, but one prominent research firm is betting it’s set to rise. And the reason? To paraphrase a Clinton-era political saying, it’s the election, stupid.

Regardless of whether Joe Biden or Donald Trump wins a coveted second term, inflation will increase, predicts the research firm Oxford Economics. The question is how much. Both presidents’ policies are inflationary, albeit in different ways, Oxford says. And while the broad trend lines of the economy will remain the same regardless of who controls the White House or Congress, how steep they end up being could change drastically from one political reality to another.

The June Consumer Price Index (CPI) showed that inflation moderated substantially last month, but rising costs for key goods and services continue to pressure peoples' wallets. Prices fell in June for the first time in almost two years. Headline CPI declined 0.1% month-over-month, for the first drop in 23 months, according to the U.S. Bureau of Labor Statistics. Economists forecast inflation to increase by 0.1% vs May. On an annual basis, CPI rose 3.0% in June – down from 3.4% the prior month – to beat estimates for a 3.1% gain. Core CPI, which excludes food and energy costs, likewise surprised to the downside, rising just 0.1% in June vs the previous month. Forecasts called for a 0.2% increase. "This morning’s inflation report was much better than expected, showing a decline in headline inflation driven by lower energy costs," says Mike Cornacchioli, senior vice president for investment strategy at . "Core inflation also posted its smallest monthly gain since August 2021, helped by a slowdown in shelter growth and lower auto prices." The bottom line from the is that prices are still rising at a rate not seen in generations. Between 2000 and 2020, annual inflation in the U.S. averaged just 2.1%. (Recall that the Federal Reserve's inflation target is 2%.) Perhaps we didn't appreciate it enough at the time, but the first two decades of the 21st century were a sort of Goldilocks era for inflation: not too fast and not too slow. Just have a look at some of the subcategories in the latest CPI report to see how much things have changed. Below we highlight the goods and services that are weighing most heavily on folks' finances. On a monthly basis, most categories tracked by the BLS showed price declines. However, a few select categories still stuck out. The index for food prices increased 0.2% last month after rising 0.1% in May. On an annual basis, food away at home is up 2.2%, led by a 4.1% increase in food away from home and a 1.1% rise in food at home. Apparel was another area where consumer continued to feel some sticker shock. Prices rose 0.1% last month after declining by 0.3% in May. Over the past year, apparel prices have gone up 0.8%, per the BLS. Elsewhere, the medical services index expanded by 0.2% in June after rising 0.3% the previous month. Housing as measured by the shelter index rose 0.2% last month, slower than the 0.4% rise in May. However, on annual basis, shelter costs were up 5.2% "Shelter, which comprises the largest portion of CPI, decelerated meaningfully from 0.4% in May and was responsible for the downside beat," says José Torres, senior economist at .

Core inflation, which excludes volatile food and energy items, was a touch higher than analysts expected in Thursday's second-quarter GDP report, rising at an annualized rate of 2.9% instead of 2.7%. The reasons for the surprise will become clear Friday, when the Commerce Department releases the personal-consumption-expenditures price index for June. Economists can estimate PCE inflation using earlier reports from two other gauges, the consumer price index and the producer price index. Most economists expected core PCE inflation of about 0.2% in June prior to Thursday's report. The GDP report suggests that either April or May figures for core inflation—which were 0.26% and 0.08%, respectively—will be revised higher on Friday, or the June figure will be higher than economists expected.

Thanks to the patents system, pharmaceuticals companies benefit from a monopoly situation and exclusive commercial rights. They also benefit from a gross lack of transparency: they are not obliged to disclose the real costs of research and development (R&D) required to develop the product. Pharmas can therefore fix the prices as they wish and maximise the profits, to the detriment of patients.

The price is crucial for poor countries whose budgets for health are limited, and where the frequent absence of a health insurance system obliges patients to pay for the drugs out of their own pocket. This situation is also an important factor in rich countries, as it can result in decisions on rationing and endanger the continuation of universal health cover.

In the late 1960s, the combined costs of the Vietnam War and President Lyndon B. Johnson’s Great Society programs sent prices rising. In the 1970s, the chief drivers were soaring energy costs and supply disruptions caused by the Yom Kippur War of 1973 and then the Iranian revolution of 1978-1979. It was a vicious cycle: Geopolitical upheaval caused economic upheaval, which then added to the underlying global instability.

High oil costs and scarce supplies caused ruptures within the democratic world, as Japan, France and other U.S. allies scrambled to cut bilateral deals with oil producers. Inflation ate away at an American defense budget that was already falling as a result of post-Vietnam retrenchment.

For individuals and economies, the effects of hyperinflation can be devastating. The prices of consumer goods rise too fast for wages to keep up, leaving consumers unable to pay for basic necessities. “Hyperinflation will generally cripple the economy and at times cause a full collapse of the economic and monetary system,” says Brian Stivers, investment advisor and founder of Stivers Financial Services. This collapse can occur in many ways, he says. People may begin hoarding products out of fear of future price increases or reduced supply, which exacerbates hyperinflation by creating even greater shortages, Stivers says. People’s cash savings lose all value. This can cause the entire banking system to become destabilized as the loans banks hold lose value and depositors withdraw funds or stop making future deposits. The value of the nation’s currency can even collapse. Milan says that an economy faced with hyperinflation will often fall into a deep or even depression.