Most of the time, including during recessions, serious financial instability is not an issue. The standard models were designed for these non-crisis periods, and they have proven quite useful in that context. Notably, they were part of the intellectual framework that helped deliver low inflation and macroeconomic stability in most industrial countries during the two decades that began in the mid-1980s.
The fall of Lehman Brothers seven months later sent shockwaves through the global economy, marking the onset of what is now known as the Great Recession. Still today, many economies are struggling with the aftermath of the crisis, not only economically, but also socially and politically. The tectonic shifts in financial conditions that erupted so violently took place beneath a seemingly calm macroeconomic surface.