Donald Trump’s trade team has based their analysis on a remarkably silly mistake
Reading this, you might wonder why it is that in the real world, economists actually do try to develop complex computer models of the economy. The answer is that the alternative method Ross and Navarro are proposing doesn’t even remotely work.
This is 101ism. The idea that a simple Econ-101 level understanding of a topic will just scale up to the macro level. The assumption that every market will work like a guns and butter chart from day three of Econ 101 is easily disproved, but this doesn’t stop 101ism. People like simple solutions. This DSGE charts are hard, have Greek letters and lots of math. 101ism sells.