ABSTRACT
The deep crisis of the world economy triggered by the US subprime crisis in 2007 (henceforth, the Great Recession) was accompanied by a crisis in economics, especially macroeconomics, of not inferior gravity. This was not just a coincidence but the most recent expression of a far-reaching interaction between the macroeconomic performance of industrialized economies and the evolution of macroeconomics (henceforth, the ‘Interaction’). Although we can find earlier examples, the Interaction became systematic with the birth of industrial capitalism in the late eighteenth century and became progressively stronger henceforth. We may observe a recurrent general pattern. A major crisis of the economy typically produces a radical redirection in mainstream macroeconomics. In its turn, the new macroeconomic paradigm contributes to shape a new phase of economic growth, although much more slowly and with a longer lag. The new growth regime, after a while, progressively betrays its shortcomings until a new major crisis emerges. We emphasize that the Interaction should not be understood as a mechanistic feedback. In particular, we stress that its specific features change significantly through time.
