I’ve made two points before in my series on why macro is so hard:
- A lot of crap gets passed off as expert opinion in macroeconomics.
- We focus too much on prices and not enough on quantities (a corollary to this is “never reason from a price change”).
Scott Sumner hits on both of these in this Econlog post entitled “Weak Currencies Don’t Cause Trade Surpluses”.
He discusses the relatively common viewpoint that Germany has trade surpluses because the Euro is a weak currency.
Of course, people who are aware of the data, or who are willing to spend many seconds looking it up on the internet, know that Germany has run trade surpluses for a long time … when the Euro was weak and strong.
Then he ends with a pithy quote:
Is there any field outside of macroeconomics where the so-called experts make more elementary errors in opinion pieces?
Hmmm. Well I could think of a few social science fields where I think they’re just making it up as they go along, but as to actually making errors, I think he’s probably right.