Professional economists are annoyed that many non-experts think they understand macroeconomics (see here and here). As a “non-expert” (someone who hasn’t formally studied macroeconomics except in undergrad) I think the reasons are actually pretty simple:
- The experts don’t even agree on macroeconomics. There are so many “schools” of economics and the schools have shifted so many times over the last 100 years that no one even seems to know what “macroeconomics” actually is. Is the real macro “Monetarism”? Is it Keynesianism? Is it New Keynesianism? Is it Market Monetarism? Is it Post-Keynesianism? Is it Austrian economics? Is it Real Business Cycle Theory? Is it New Classical Econ? The experts don’t even agree on their own views so they naturally leave the door wide open for criticism and opinions. The outside world views macro economists as a big group of disagreeing (and at times confused) “experts”. So the door is left wide open for the outside to criticize and interject.
- Macroeconomics is actually much broader than “economics”. The field of macroeconomics actually covers many fields like accounting, banking, central banking, financial markets, behavioral finance, etc. Many people like myself look at economists, who often make regular mistakes about how Central Banking, banking and accounting works and want to pull their hair out. I can’t tell you how many times I’ve read an economist talk about banking, central banking or accounting over the last 5 years and make blatantly erroneous comments. So you have a natural overlap with many other fields that economists actually don’t have much expertise in themselves. The reality is, when it comes to many topics in “macroeconomics” like banking or accounting, the real “non-experts” are the economists who are trying to make everyone else feel like “non-experts”. And perhaps most importantly, many practitioners in these fields view economists as people who have spent most of their time theorizing about textbook worlds rather than actually experiencing the real economy.So, it’s often frustrating to read macroeconomics because the real “non-experts” are the economists who talk about things in the overlapping fields that they don’t understand all that well.
That’s how I see it anyhow. The simple fact of the matter is that macroeconomics is much broader than just economics. And economists don’t have a monopoly on the world of macroeconomics. So they’re going to have to learn how to share with the rest of us because the fact is, they don’t agree on their own portion of the world and they flat out don’t understand many parts of the rest of it. Maybe the more relevant question here is why do macroeconomists think they have a monopoly on “macroeconomics” when macroeconomics is actually much broader than just economics?
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.