The University of Auckland law professor was speaking during the presentation of her new book, The Fire Economy, in Dunedin this week.
Prof Kelsey laid out three ''take home messages'' from the book.
• New Zealanders were in denial about the future of neoliberal economics.
''Maybe everything's not as rosy as we've been led to believe,'' she said.
• ''The neoliberal orthodoxy that we've lived with over the past three decades is increasingly facing a crisis of legitimacy.''
• New Zealand needed to take steps to move into a ''post liberal paradigm along with other parts of the world'', and therefore needed to imagine what that alternative paradigm might look like.
The name of her book referred to an acronym for economies primarily based around ''finance, insurance and real estate''.
New Zealand's was a fire economy, she argued, and it was too reliant on debt.
In such an economy, ''you borrow money to make money''.
