The rational expectations revolution provided the intellectual basis for ‘light touch’ regulation, by positing that markets will auto-correct left to themselves, and state interventions can only be counter-productive. Many economists felt that the big debates against Keynesian and Marxist economics had already been won. The period of the great economic moderation after the oil price shocks of the 1970s only strengthened the neoclassical consensus, while the fall of the Berlin wall a quarter century ago put a nail in the coffin of Marxist economics.
Posted on: Tue, 13 Jan 2015 06:18:49 +0000
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