Over time, these informal understandings attract deep and loyal followings by economic actors. They become articles of faith. Deviations from them tend not to be illegal, but they can markedly change perceptions of risk and return. When that happens, the resulting expectations are unmoored, with significant and often highly detrimental consequences for market functioning and economic progress.
Panics can thus be understood as periods in which key articles of faith are cast in doubt. How does this happen? After long periods of economic prosperity – in the most recent case, the so-called Great Moderation – articles of faith accumulate. Some of these understandings  9  The global equity markets underperformed those in the United States.