Business economists meet: I go so you don't have to

Takeaways from the National Association for Business Economics Policy Conference

Some people related to me would consider a room full of 700 business economists talking about the economy to be…not terribly interesting. But readers of a Substack devoted to forecasting near-term GDP might disagree. Assuming that’s the case, here’s some key things that I heard and saw at the conference that ended yesterday.d

1. I find that these conferences tend to have a “theme,” something that colors many of the sessions and is on the top of mind of participants. This time, it was geopolitics. In fact, the organization’s leadership consciously decided to focus more on geopolitics, which economists often tend to devalue. The discussions revealed quite a bit of concern about China and about how the US-China relationship would develop. One open question is the role of Europe. There seems to be a disconnect: Europe looms large for economists, but geopolitical analysists tend to dismiss it. I wonder whether economists or geopolitical analysts will get the bigger surprise in the future.

2. There were two sessions on artificial intelligence. My conclusion: there are some important uses, but that the jury is still out on exactly how transformative the technology will be. Panelists noted that adoption is slow. The problem that kept coming up is the problem of “halucinations.” As long as AI remains this unreliable, it will serve as an aid to humans, rather than a replacement, and that may limit its overall economic impact.

3. There are some potential roles for crypto! I didn’t come in thinking this, but the crypto panel was convincing. One reason they were convincing is that they dismissed pretty quickly the value of independent coins like Bitcoin and also were realistic about the potential for retail use. But in wholesale and international transactions, “stabblecoins” do appear to be able to reduce transactions costs enough to matter. Plus, blockchain (decentralized transactions) might apparently be helpful in areas like financial markets. There was agreement that crypto needs a legislative framework to limit risk.

4. These conferences often focus on a set of standard issues like monetary policy, sources of productivity growth, the state of the manufacturing sector and so on. There were some sessions on these topics, but I admit that I found them less than compelling in the current atmosphere.

Finally: I struggled in vain to find one attendee who was generally supportive of the Trump administration’s economic approach. I’m sure there must have been, but I didn’t encounter any. And I always try to meet new people!

Even amonth the panelists, the relatively small number who supported some particular administration policy generally avoided any more general endorsement. In fact, the inability of the Conference Committee to get somebody from the administration to defend its policies is very unusual. Most administrations prize the ability to make their case in front of an influential audience like this. At one point I felt like Diogenes searching for the “honest man”—admitedly, the comparison is imperfect.

Business economics is hardly a profession dominated by liberals; clearly, there is a disconect between basic economics and the administration’s approach. I suppose we are going to see who is right, and possibly sooner than anybody might expect.