This Time is Different: Eight Centuries of Financial Folly
- 7h 35m
- Carmen M. Reinhart, Kenneth Rogoff
- Princeton University Press
- 2009
Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. This book proves that premise wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe. Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much--or how little--we have learned.
Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts--as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur.
An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.
About the Authors
Carmen M. Reinhart is professor of economics at the University of Maryland. She recently coedited The First Global Financial Crisis of the 21st Century and is a regular lecturer at the International Monetary Fund and the World Bank.
Kenneth S. Rogoff is the Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University. He is the coauthor of Foundations of International Macroeconomics, and a frequent commentator for NPR, the Wall Street Journal, and the Financial Times.
In this Book
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Varieties of Crises and Their Dates
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Debt Intolerance: The Genesis of Serial Default
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A Global Database on Financial Crises with a Long-Term View
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A Digression on the Theoretical Underpinnings of Debt Crises
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Cycles of Sovereign Default on External Debt
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External Default through History
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The Stylized Facts of Domestic Debt and Default
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Domestic Debt: The Missing Link Explaining External Default and High Inflation
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Domestic and External Default: Which Is Worse? Who Is Senior?
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Banking Crises
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Default Through Debasement: An "Old World" Favorite
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Inflation and Modern Currency Crashes
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The U.S. Subprime Crisis: An International and Historical Comparison
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The Aftermath of Financial Crises
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The International Dimensions of the Subprime Crisis: The Results of Contagion Or Common Fundamentals?
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Composite Measures of Financial Turmoil
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Reflections on Early Warnings, Graduation, Policy Responses, and the Foibles of Human Nature
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Notes
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References
