Since the onset of the global financial crisis, I have pointed out that advanced economies should learn policy lessons from the experience of the developing world. This argument has been reinforced by two developments last week: the destabilization of the pound after the Brexit vote in the U.K., and indications that the U.S. now has less influence over the yield curve for its government bonds.

For decades, three key beliefs structured our understanding of the economic and financial underpinnings of most advanced countries: that underlying structural forces had matured into understandable, transparent and very gradual drivers of change; that institutions were stable and well-functioning, and that these two solid foundations could withstand the vagaries of short-term political cycles. This meant that advanced economies were believed to inhabit an analytical “cyclical space,” where secular and structural changes occurred extremely slowly.

This characterization made the job of analysts and policy makers a lot easier, at least on the surface. Rather than having to deal with significantly more complex structural issues, the main task of these experts boiled down to understanding and managing business cycles. With time, even the dynamics of the business cycle were perceived to be conquerable, giving raise to the notion of persistent “goldilocks” (neither too hot, nor too cold) economies and a “great moderation.”

This framework, however, has proved both misleading and dangerous, particularly as it played down or ignored four important underlying developments.

1. The ever-increasing levels of debt and leverage needed to maintain the sense of economic and financial stability, however superficially.

2. Greater and more distorting malinvestment in artificial rather than genuine drivers of growth and prosperity.

3. A worsening trifecta of inequality (income, wealth and opportunity).

4. Growing political polarization that fuels and is fueled by a widening distrust of the political establishment, business elites and expert opinion.

It is clear that over the preceding decade, structural foundations of advanced countries started to revert to features that are more prevalent in emerging economies, particularly those with weak institutions, insufficiently deep economic and financial underpinnings, fluid social fabrics and messy politics. Yet much of the decision-making mindset continued to cling to a cyclical understanding of the economy.

Excessive reliance on a cyclical approach is the main reason that analysis and policy making in advanced economies have disappointingly lagged reality, especially in the aftermath of the global financial crisis. This also explains why most Western governments have been let down repeatedly by economic outcomes, why they frequently have been forced to revise their expectations downward and why outcomes have so often fallen short of even these lowered expectations.