The United States, with a GDP of some $12 trillion a year, currently has a current-account deficit of $750 billion a year composed of a $750 billion trade deficit and a balanced flow of factor incomes. Making your own rough back-of-the-envelope projections of U.S. GDP growth and of real interest and profit rates over the next twenty years, answer the following question: If the trade deficit stays constant as a share of GDP over the next twenty years, how large--both in 2005 real dollars and as a share of U.S. 2025 GDP--will the current-account deficit be in 2025? Why might one argue that this trade deficit is "unsustainable"?
I thought this question was funny, not because it's a bad question (it's a good one in fact) but because a) Brad DeLong is not a student in our class and b) the nature of the question is very different from the topics we've been covering and from the other questions that were asked.
A couple of lines down I noticed the comment, "Brad DeLong is one of your students? Weird."
Naturally I thought this was very funny because I was thinking the exact same thing so I replied, "Yeah and given his question I can tell you he's been skipping class." The point of the comment was to establish what I found to be an hilarious juxtaposition between what he thought we were focusing on (projected growth calculations) and what we were doing (pretty much everything besides that).
It would appear not everyone thought this way. Robert Schwartz commented "Say something snarky about Brad Delong and your post will be taken down on this blog and his." To be sure, Prof. Schwartz, I don't mean it as "snarky," merely good humored.
The whole episode speaks to the immense confusion I feel when I think about the hierarchial nature of academia--a place where ideas are supposed to flow freely. There are things to say about that, but it's a post for another time.
2 comments:
"Say something snarky about Brad Delong and your post will be taken down on this blog and his."
What exactly does this mean anyway? Will your post be taken down as in refuted, or as in deleted? I assume your post wasn't on Delong's blog so how can he take it down?
This must then mean that it is going to be refuted because no one can delete something that doesn't exist. So, what exactly is going to be refuted? That Delong hasn't been skipping class? I guess that will be easy to refute and isnt something to get upset about on Schwartz's part.
Agreed. I really don't know what the deal with Schwartz's comment was in the first place.
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