Is a grand new economic theory needed?

The 1929 crisis gave rise to Keynesian theory, as classical theory could not explain the underemployment. Inflation in the 1970s and 1980s gave rise to supply-side theories and a new monetary theory, after policymakers tried to respond to a supply shock by stimulating demand, resulting only in inflation. Is a grand new economic theory needed today to explain recent developments? This is not certain, as: We have models that explain financial crises: herd behaviour, self-fulfilling expectations, rational bubbles, bubbles of optimism , balance-of-payments crises, etc. We understand why inflation is low in the short and long term: wage earners’ loss of bargaining power ; the switch from transaction money to investment money; We have explanations why technological innovations do not boost productivity: corporate concentration and dominant positions, labour market polarisation linked to the digitalisation and automation of the economy; We understand why interest rates are abnormally low, given central banks’ new behaviour and global excess savings. The need is therefore not for a grand new theory, but instead for a fuller understanding of specific and local economic mechanisms and of the new behaviours of select economic agents.