Macroeconomics is the business of knitting together the narratives of capital flows with investment-effective time frames. Of these two steps, mainstream market economics is most challenged by the first, as evidenced by being wrong for the past eight years. The second part is simple for the plodders, just assume nothing will go wrong and you’ll mostly be right.
For the contrarian macroeconomist the narrative is the easy part given his or her freedom to pursue unorthodox explanations. The second step is harder because, as we know in investment, getting timing wrong for when an imbalance will adjust is indistinguishable from there being no imbalance at all.
In early mid-2013 I wrote the following: