Wealth & Money Quote by Martin Feldstein

A polite sentence with a loaded agenda: Feldstein is flagging the limits of economic precision at the exact moment policymakers most want a dial they can turn. The setup nods to the vast empirical literature on exchange-rate elasticities, then punctures any illusion of a clean conversion chart: X percent dollar depreciation equals Y percent improvement in the trade balance. That gap between studied and settled is the point. He’s not confessing ignorance so much as warning against overconfident policy prescriptions that treat the dollar like a thermostat for the deficit.

The subtext is a critique of technocratic certainty. Trade deficits are mediated by lags, pricing-to-market, global supply chains, and the reality that firms don’t instantly swap suppliers because the currency moved. Even when relative prices shift, volumes may not; contracts lock in terms, and import demand can be stubborn. Feldstein is implicitly invoking the classic problem that the adjustment path is messy (the J-curve logic) and that measurement itself is contested: what elasticity estimate, over what time horizon, in what regime?

Contextually, Feldstein spent his career at the collision point of academic economics and Washington’s appetite for actionable numbers. His line reads like a memo aimed at officials tempted to sell devaluation as a straightforward fix. If you can’t say how much the dollar must move, you can’t promise outcomes, and you shouldn’t design strategy around a single lever. It’s less about humility than about steering the debate toward structural drivers of the deficit and away from currency quick fixes.