This is the second article in a three-part series on the self-destruction of neoclassical economic theory. See part one here.
As the neoclassical economics tradition gradually gave up its central position in universities over the last forty years, it remained triumphant in the real world. But the global financial crisis brought a sudden, shocking end to this exhuberism.
The failure of neoclassical models to anticipate it (and the success of many non-orthodox theorists to do so – including me, but also Wynne Godley and his collaborators using a sectoral balances approach, Ann Pettifor, Michael Hudson, Nouriel Roubini, Dean Baker, and numerous Austrian-informed commentators) suddenly called into question the role of the tradition.