For half a century, we monetary economists have focused overwhelmingly on the inflation/disinflation cycle. If we said monetary policy was too easy at some point, we were thinking of the dangers of inflation. If recessions resulted from monetary tightening, the motive was disinflation. I believe the result of the global financial crisis will be a paradigm shift in macroeconomics, under which financial cycles will be granted as much importance as the inflation/disinflation cycle. Of course nothing is new under the sun: scribblers of the past gave us bubbles and panics (Kindleberger), the credit cycle (von Hayek), the crash (Minsky), and debt deflation (Irving Fisher), not to mention financial markets as casinos or beauty contests (the Keynes of the General Theory).
– Jeffrey Frankel, De Nederlandsche Bank, Amsterdam (doc)