The American economist Robert Shiller successfully called the peak of the economy boom. Irrational Exuberance, published in 2000, became a best seller. Prof Shiller has done more than any other mainstream economist to emphasise how psychology influences markets. Early in his career he demonstrated that fluctuations in asset prices are far larger than can be explained by economic, or any other, concept of rational behaviour.

And yet alongside Prof Shiller’s Dr Jekyll can be found his Mr Hyde. This alter ego believes that many economic problems would be solved by creating new speculative markets. He favours tax breaks for market makers who create still more exotic financial instruments.

One side of him recognises that these instruments may be used more often to gamble than to hedge. But the other applauds not just mortgage securitisation but the process of dividing and repackaging securities.