The economic paradigm developed during the boom years was based on the idea of flexibility. The economically successful countries were those that allowed flexibility in goods and labour markets. Rapid growth lay ahead of them if they permitted companies to hire and fire without restrictions; if wage contracts made it possible for companies to adjust wages up and down quickly to changing economic conditions.

New growth models were developed by academic economists stressing the need for flexibility. International organisations chastised those countries with rigid labour and goods markets and urged them to introduce “structural reforms”. The European Commission was mesmerised by the idea of flexibility and cooked up the Lisbon Agenda with the ambition of transforming the European Union into a flexible economy.