For the second time in a generation, the economics profession is in a tizz. After the global financial crisis (GFC) of 2007–9, there was much heart-searching in the common rooms. Why did economists not see it coming, as the late Queen famously asked on her visit to the London School of Economics? They seemed to be in thrall to the high priests of the efficient-markets hypothesis in Chicago. If agents were trading with each other at prices set in free markets and inflation was under control, what could possibly go wrong? 

Some universities revised their curriculums as a result, in particular to give greater emphasis to behavioural analysis and to integrate financial markets into their models. Previously the finance channel had been seen as a neutral transmission mechanism, with the risks of overexpansion of credit and instability minimised. Hyman Minsky came back into fashion after years of neglect. George Soros funded a network of Institutes of New Economic Thinking, whose papers continue to challenge mainstream thinking.

 But some core elements remained in place. The profession’s intellectual centre of gravity was anchored in a belief that free trade and globalisation were foundational, that the ‘rules-based international order’ sustained by the USA and Europe was still the least worst option and that independent central banks and financial