Instead, the priority should be growth, because over the longer run that meant vastly more wealth. Naturally, the Great Recession devastated this argument. Lucas was not entirely right: there was still an awful lot to be learnt about depression-fighting and high costs to getting it wrong.
And yet, we may perhaps have learnt the lesson too well, and focussed too much on demand management and smoothing economic fluctuations. Today, there is little policy space left to boost demand, and it is surprisingly hard even to specify where we are in the business cycle. We should take this as an invitation to shift our focus.