Abstract

In this short essay the author provides his views on what intellectual errors we have made and what lessons these errors offer us moving forward. His main objective, however, is not to dwell on the intellectual currents of the past, but to stress that economic theory still has a lot to teach us and policy makers as we make our way through the crisis. He argues that several economic principles related to the most important aspects of economic performance, the long-run growth potential of nations, are still valid and hold important lessons in our intellectual and practical deliberations on policy. But, curiously, these principles have played little role in recent academic debates and have been entirely absent in policy debates. As academic economists, it is these principles and the implications of current policies for the growth potential of the global economy that we should be reminding policymakers of.