In August 2007, when the first signs emerged of what would come to be the most damaging global financial crisis since the Great Depression, the New Keynesian paradigm was dominant in macroeconomics. It was taught in economics programs all over the world as the framework of reference for understanding fluctuations in economic activity and inflation and their relation to Monetary and fiscal policies. It was widely adopted by researchers as a baseline model that could be used flexibly to analyze a variety of macroeconomic phenomena. The New Keynesian model was also at the core of the medium-scale, dynamic stochastic general equilibrium (DSGE) models developed and used by central banks and policy institutions throughout the world. Ten years later, tons