The policy consensus ruling European political economy: the political attractions of discredited economics

Since the Great Recession in 2008 academic economics has come under heavy criticism. But a straightforward alternative is not in sight either. We analyse in this article how the major flaws of applied economics are the mirror image of its attractions to policymakers, mainstream political parties and reform-minded administrations. We first assess what the consensus until recently has been and how it could have been implicated in the crisis. Secondly, we argue, following Hall, that the policy consensus continues to persist because it is politically attractive. The article ends with observations of how the management of the Euro area crisis still shows the attractiveness of the consensus.