Ben Bernanke, chairman of the Federal Reserve, admitted this week that the US may already be in a recession. According to the University of Michigan’s monthly survey, 86 per cent of Americans had reached the same conclusion. Yet his gloomy near-term prognosis was brightened by more optimistic forecasts for the real economy later this year and next.

Let us hope his optimism is contagious. The ebb and flow of the economy has always been channelled by a combination of inescapable accounting truths and whimsical animal spirits. It is rare, however, for economic growth to be so in thrall to psychology.