CEO Daily: Tuesday, December 1

–No need to wait for the Fed to tighten credit conditions; it’s already happening. You can see it in the leveraged loan market, or in widening spreads for high yield bonds. U.S. banks are also tightening credit. More in this morning’s FT.

–I’ve written a few times recently about how Americans pay the highest prices for pharmaceuticals in the world. If you want to put some meat on those bones, look at the analysis in this morning’s Wall Street Journal, which concludes “Americans fund much of the global drug industry’s earnings, and its efforts to find new medicines.”

–One of the biggest mysteries of today’s economy is found in the U.S. productivity numbers, which have been abysmal. At Fortune, we write a lot about the dramatic changes in business being brought on by enterprise technologies like the cloud, big data, the Internet of things, machine learning, and so on. Yet this so-called revolution has barely budged U.S. productivity numbers, which have grown less than 1% for the last five years – well below historical averages. Why? Byron Wien of Blackstone looks at some theories here. But without productivity growth, wages and living standards can’t grow.

I’ll be moderating a discussion on the productivity puzzle between Larry Summers and Glenn Hubbard tomorrow morning at the New York Fed, hosted by the Economic Club of New York. If they have the answer, I’ll report back Thursday.

Enjoy the day

Top News

• IMF gives China's yuan a boost

The International Monetary Fund admitted China's yuan into its benchmark currency basket, joining the dollar, euro, pound sterling and yen in an important milestone for the Asian nation's integration into the global financial system. To meet the IMF's criteria, Beijing had undertaken a flurry of reforms, including better access for foreigners to Chinese currency markets. The yuan's inclusion will have few immediate implications for financial markets, though it is the biggest change to the IMF's basket composition in 35 years. Reuters

• India's Modi calls for 'Climate justice'

India’s Prime Minister Narendra Modi continued his call for 'Climate justice' on the first day of COP 21 in Paris – a climate conference featuring nearly 150 sitting presidents and prime ministers. Modi has positioned himself as the loudest voice for the developing world, essentially asserting that poor, developed nations like India should not be forced to pay the price for decades in which the U.S. and Europe have polluted the planet at a time when countries like India are becoming major industrial nations. Fortune

• Mattress Firm to buy Sleepy's

Mattress Firm has agreed to pay $780 million for the company's biggest rival, a deal to unite the two largest specialty mattress retailers in the U.S. The deal will give Mattress Firm a total of almost 3,500 retail stores and 80 distribution centers in 48 states. It comes as shares of Mattress Firm have been dragged down 31% in the past 12 months, amid concerns of sluggish demand and discounting in the sector. Bloomberg

• $1 alternative planned for $750 drug

Prescription drug manager Express Scripts is expected to announced today that it will promote use of a medicine that contains the same active ingredient as a drug called Daraprim – which has generated headlines after Turing Pharmaceuticals began charging $750 a pill for the decades-old treatment. The compounded medicine, already produced and sold by Imprimis Pharmaceuticals, could increase sales as Express Scripts manages prescriptions for tens of millions of Americans. Turing, managed by former hedge fund manager Martin Shkreli, raised eyebrows earlier this year after it acquired the rights for Daraprim and boosted the price overnight to $750 a pill from $13.50. New York Times (subscription required)

Around the Water Cooler

• The decline of Black Friday

Spending per person over Thanksgiving weekend peaked at $423.44 in 2012 and has fallen each year, reaching $380.95 last year, according to the National Retail Federation. That decrease occurred despite longer and longer store hours. Why? Well major retailers including Amazon.com, Walmart and Macy's have been rolling out Black Friday deals well ahead of the actual day on the calendar – aiming to lure customers earlier in the shopping season. And it is likely that average spending will continue to drop on Black Friday, while the industry gets more of a lift from Cyber Monday. Fortune

• Driverless cars to get a race series

We've spent a lot of time wondering what our streets will look like when robots take over the steering wheel. Now, a race series is planning to debut commercial races using self-driving car technology next year. Organizers are hopeful that the races will court a younger audience to motorsports by creating a sci-fi version that a decade ago would have seemed impossible to pull off. Fortune