This paper presents evidence to suggest that the dynamics of ideational change in macroeconomic policy differs from that evident in financial regulation. It contrasts the experience with stagflation in the 1970s, as a slow burning crisis with the experience of the much more dramatic financial rupture of 2007-09, as an explosive crisis. The first crisis became conceived of as a crisis of macroeconomic policy and of the state. Applying Peter Hall’s three orders of change it is argued that a relatively protracted process over six years resulted in a 1+2=3 formulation in the case of British macroeconomic policy from 1973-1979. The second crisis followed a more dramatic pattern and the rapid and immediate ideational casualty was the efficient markets perspective. This was ain the first instance a crisis of the global financial system and of private institutions, so was in the first instance a regulatory issue. The subsequent movement to macroprudential thinking was a good deal more rapid in a period of little over six months. This has followed a formulation of 3 (might) =2+1, reversing the sequence that applied in the case of macroeconomic policy in the 1970s. The patterns of contestation surrounding this sequencing and the actors driving change have also been reversed in the context of the two cases. The paper explains this by pointing to the different political dynamics surrounding macroeconomic policy and financial regulatory policy, how these policy areas engage and exercise political actors in different ways and how these policy areas subsequently respond differently to different forms of financial crisis.
