New Delhi, March 16 -- A prominent economist once told me that macroeconomic policy debates are all about the prime mover, to which other variables respond. The implication, he explained, is that "You can invert policy prescriptions simply by claiming a different forcing variable."

A paper by Stephen Miran, published before he was nominated to chair US President Donald Trump's Council of Economic Advisers, does precisely this. Since his views likely reflect those of the administration, they warrant close attention.

The traditional view of why the US runs chronic trade deficits is that it overspends, owing largely to its fiscal deficits (the 'forcing variable'). But the true forcing variable, Miran argues, is the rest of the world's hung...