It’s Back To First Principles — And Hayek — At The Bank of England

The London Telegraph:

in a strange way, the by-product of this financial collapse has been to free economics of this burden. In the corridors of the Bank of England and Treasury, there is a distinct whiff of excitement. For the first time in decades, economists have been able to throw away their textbooks and go back to first principles; to exhume once-sacrilegious figures such as John Maynard Keynes or Friedrich Hayek. It is unsettling, no doubt, but this is a fertile moment, an opportunity from which may be born a better model of how to run an economy ..

Update — David Rawcliff comments:

the crisis has damaged the reputation of economics, but at the same time thrown it open to new ideas and the return of old ones. Ideas that lie on the periphery of the discipline can now move to the troubled centre. We can, in Conway’s words, “exhume once-sacrilegious figures such as John Maynard Keynes or Friedrich Hayek.”  Given the Austrian School’s performance in predicting the current crisis, may I suggest we choose the latter?

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