In the aftermath of the inflation and recessions of the 1970s and early 1980s, from the early 1990s onwards there was a major upswing in most advanced countries. In the UK it was the longest period of economic expansion on record. But it came to an abrupt end in 2007, with the freezing of the interbank markets and the collapse of Northern Rock, followed in 2008 by Bear Stearns and Lehman Brothers.
Before the crisis, many economists had begun to call this period of upswing the Great Moderation; and, echoing developments in other disciplines such as political thought, some openly wondered whether we had found the answer to the questions that had perennially been posed by “boom and bust”. But given the magnitude of the shocks that hit the global economy in the crisis period of 2007-8 (and since then in a number of countries) the apparent reduction in macroeconomic volatility of the earlier period now appears, with the benefit of hindsight, to have been largely illusory. We therefore argue that the period 1992-2007 can more accurately (and less ambitiously) described as the Long Expansion – hence the title of this volume.