THE 2007/8 CRISIS, whose negative persistent effects on output, productivity, employment etc lingered in South Africa until met by the 2020 coronavirus economic crisis, was as much a financial crisis as a crisis of macroeconomics.
The crisis not only shook the consensus on macroeconomic policy, but exposed the severe limitations of monetary policy, especially the key tenets of its intellectual foundations.
As a consequence, in Europe, Japan, the US and in developing countries like China, Bangladesh, Brazil and many others, the crisis caused swift changes in the operational conduct of macroeconomic policy, especially monetary policy.
In South Africa, it was, sadly, business as usual, despite critical plodding from careful economists.
It had to take one-and-a-half decades of suffering for the South African Reserve Bank (SARB) to recognise that the conduct…
