If John Maynard Keynes were reborn today, I am sure he would be gratified to discover that his economic theories were being so widely applied. Yet, while Keynes might conclude that people had learnt the lessons of the 1930s, I doubt that he would be so sanguine about the lessons of the 1920s.

After the first world war, the US found itself transformed from a debtor into the world’s largest creditor. It had extensive claims on its wartime allies in the form of war loans. Britain and France, in turn, had large claims on Germany for reparations. To satisfy these claims, a large westward flow of money was required. The amounts involved were substantial, representing more than 100 per cent of German gross domestic product and 15 per cent of American GDP.