It has become a commonplace to blame central banks for recurrent bubbles and financial crises, recessions, massive wealth inequality and widespread disenchantment with capitalism, and latterly for inflation. But this important new book argues that the enormous intellectual error of which central banks have been guilty sprang from the generation-long arrogance of the mainstream academic macroeconomics profession, which ignored interwar lessons and the crucial importance of intertemporal disequilibrium.

The book shows why and how the intellectual error, most evident in the deliberations and actions of the US Federal Reserve from the mid-1990s onwards, set in train the global consequences which now threaten the continued existence of a capitalist society. In particular, it explains how central banks have needed the financial- sector misbehaviour they so piously castigate. While a key early figure in this Greek Tragedy was an ardent advocate of capitalism – Alan Greenspan, the revered former Federal Reserve Chairman – culpable hubris has underlain the whole structure of modern macroeconomic theory. Nemesis, the book shows, has followed ineluctably.

Bernard Connollyis a renowned British economist and author of the international best-selling book on monetary matters,The Rotten Heart of Europe. A consultant to wealth managers, he is highly respected by central bankers, policy-makers and financial-market participants, who appreciate his depth of highly original theoretical understanding and his ability to apply that theory successfully to the real world. He has published articles in the financial and general press throughout the world.