IT IS possible, contrary to the predictions of most economists, that the US will get through this disinflationary period and make the proverbial “soft landing”. This should prompt a more general reconsideration of macroeconomic forecasts.

The lesson is that they have a disturbing tendency to go wrong. It is striking that Larry Summers was right two years ago to warn about pending inflationary pressures in the US economy, when most of his colleagues were wrong. Yet Summers may yet prove to be wrong about his current warning about the looming threat of a recession.

The point is that both his inflation and recession predictions stem from the same underlying aggregate demand model.