“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must before seen. Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.”
- Bastiat
I love this explanation of the difference between a good and bad economist. You have to think about the longer-term or second order effects form some policy action. This is especially true when being a macro economist in finance. The Fed lowers rate which may have an immediate effect on short rates, but you have to think about how this changes expectations and impacts other markets. It is not the immediate effect bur rather the impact on expectations that matters.
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