My time as an undergraduate economics student at the University of Glasgow coincided with what the former Governor of the Bank of England, Mervyn King, called the “NICE” decade – a non-inflationary, consistently expansionary period.

Growth was steady, unemployment fell, and inflation remained low and stable. This apparent "new normal" fostered a confidence that the big macroeconomic challenges of the 20th century had been solved. "Boom and bust" was history.

Today, that confidence feels misplaced. Since 2008, we have moved from one shock to another: the global financial crisis, the euro crisis, Brexit, the pandemic, Russia’s invasion of Ukraine, and now war in the Middle East. What once looked like rare events are now a defining feature of the economic landscape.

Measures of economic uncertainty have been rising in recent years, while volatility in inflation and growth is markedly higher than in the early 2000s. The IMF and others now emphasise downside risks and fragility, rather than a steady convergence back to trend.

Scottish election needs an injection of financial reality

Yet some of our economic thinking has not caught up with this new "new normal".

Forecasts – whether from governments, central banks or........

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