Last week Thomas Sargent was awarded the Nobel prize for economics. The idea most economists would associate with him is “rational expectations”. But the citation does not use the term. It asserts that his methods have been adopted around the world, but gives little clue what these are, hinting only they can be applied to the study of macroeconomic relationships.

The Swedish Academy is brave, but not very brave. It sensed that in present circumstances a prize to those who claim to understand the business cycle might encounter criticism. The public suspects that economists who specialise in this subject are of little use, and some professional critics agree. Willem Buiter has observed that the macroeconomics in which Prof Sargent is a central figure has been a “privately and socially costly waste of time and other resources” and represented “self referential, inward-looking distractions at best”.

Needless to say, this is not how Prof Sargent sees it. In an interview published last year on the Federal Reserve Bank of Minneapolis website, he dismissed critics of the state of macroeconomics as too ignorant to deserve a response. Asked to explain how his research illuminated the recent crisis, he makes much of the finding that deposit insurance can halt bank runs. This insight is not, however, unique to Prof Sargent, who must be aware that the establishment of the Federal Deposit Insurance Corporation precedes the paper he cites by 50 years.