But even now, I think that Wren-Lewis is suffering from a bit of what I’ve come to think of as the Blanchard delusion (sorry, Olivier!): the delusion, widely prevalent on the eve of crisis, that we had in fact reached some kind of resolution of the bitter macroeconomics wars. Wren-Lewis declares that

In 2010, the standard business cycle model was the New Keynesian model, and the implications of that model for the efficacy of appropriately designed fiscal policy are clear.

I guess there’s some room for interpretation of the meaning of the word “standard”, but it became painfully clear in 2008-2009 that many economists — especially, but not only, at the University of Chicago — not only didn’t work in a New Keynesian framework, they were unaware that such a thing existed. As far as they knew, everything Keynesian had been refuted in the 1970s. And as for “the efficacy of appropriately designed fiscal policy” — well, here’s John Cochrane:

“It’s not part of what anybody has taught graduate students since the 1960s,” Cochrane said. “They are fairy tales that have been proved false. It is very comforting in times of stress to go back to the fairy tales we heard as children but it doesn’t make them less false.”

It would be interesting to know how many graduate departments were in fact teaching New Keynesian macro in 2008. My guess is that a fair number weren’t — that students literally had no exposure to the notion that monetary policy, let alone fiscal policy, could play an effective stabilizing role. The notion that we had reached some kind of intellectual detente was, as I said, a delusion: Keynesians had rebuilt their models to make them acceptable to the other side, but the idea that there was any real dialogue was a fantasy.

Now, it is true that New Keynesian models were dominant in policy-oriented research shops — at the various Feds, at the IMF, the Bank of England, etc.. But economists in such places aren’t as free to offer independent views as the academics, so the fact that NK was very much not established in the academic world mattered a lot.

Even given all that, it has been remarkable how unwilling many economists whose theoretical framework seems to be more or less Keynesian have been to go with the implications of that framework for fiscal and monetary policy; I think of people like John Taylor and Martin Feldstein. So there are deeper problems. But Wren-Lewis is, I think, too sanguine about the starting point.