In the last week, the Economist and the Financial Times have both told us that macroeconomics is in a state of meltdown because it failed to prevent or predict the global financial crisis. This is more than a spat in the corridors of academe. In the real world, it actually makes it harder to predict the future of the current financial crisis, and potentially increases volatility.

The problem is that we always rely on some kind of interpretative theory to anticipate the future. If everyone agrees on the appropriate macroeconomic prescription then the future outcome looks predictable. But if the macroeconomists advising governments are divided into two warring factions, who should investors – on whom a recovery partly depends – believe?