A convention-busting reappraisal of global macroeconomics.
Macroeconomics, the study of economic systems involving large regions, is a forbidding field, generally dominated by academically esoteric analysis that’s often inaccessible to lay readers. On the other hand, popular treatments of the subject liberally dispense investment strategy without adequately explaining complex financial contexts. Debut author Gonzalez situates his own work in the space between those two options, furnishing a study that’s intellectually rigorous but ultimately practical. He begins with what he calls an “investing epistemology,” explaining the ways that macroeconomics falls short of being a full-fledged science. The unscientific character of the field, however, doesn’t foreclose the possibility of rational prediction, but according to the author, it requires a panoramic understanding of the history of macro markets. The book’s first section is largely structured around such history, providing an astute investigation of the 1944 United Nations Monetary and Financial Conference, the 1985 Plaza Accord, the conclusion of the Cold War, the American elections of 1994, and a host of other significant events. The book’s second part focuses on other topics, although historical analysis still plays a major, even principal, role. Part of what makes macroeconomics such a challenging discipline is the vast array of pertinent factors that underlie change, including shifting political landscapes, climate change, institutional structures, and global disruptions, such as war. (In fact, one of the highlights of the book is its examination of the macroeconomic repercussions of several modern conflicts.) Although he’s heavily influenced by George Soros, Gonzalez’s perspective is his own, and he intrepidly opposes prevailing wisdom when evidence leads him to new conclusions. For example, he says that commodities and equities aren’t always given a boost by military conflict, and that growth, interest rates, and inflation sometimes move along contradictory currents. Sometimes, the author delivers his iconoclasm with real verve: “However, in financial macro the laws of supply and demand do not hold. Pardon me, you might say. Yes, they do not hold.” This is a well-researched study, brimming with helpfully illustrative graphs. Although the author doesn’t appear to be very interested in providing immediately actionable investment advice, his book is still a highly valuable guide.
A provocative consideration for the thoughtful investor.