This Time Is Different: Eight Centuries of Financial Folly

· Princeton University Press
3.9
19 reviews
Ebook
512
Pages
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About this ebook

The acclaimed New York Times bestselling history of financial crises

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. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong.

Covering sixty-six countries across five continents and eight centuries, This Time Is Different presents a comprehensive look at the varieties of financial crises—including government defaults, banking panics, and inflationary spikes—from medieval currency debasements to the subprime mortgage catastrophe. Reinhart and Rogoff provocatively argue that financial combustions are universal rites of passage for emerging and established market nations.

A remarkable history of financial folly, This Time Is Different will influence financial and economic thinking and policy for decades to come.

Ratings and reviews

3.9
19 reviews
A Google user
Yes, this is not an easy read in the sense that the authors write for a lay audience. However, I managed to get through it with a basic comprehension of their exposition and their message, despite the fact that I am an amateur at economics. One key message is that financial markets are not self-regulating. Competition for profit leads lenders to take on dangerous and ultimately deadly levels of risk, even to serial defaulting sovereigns. Another message is that memory assets depreciate over time, leading regulators to discount the past as a guide to future pain. One of the early charts shows a 2-generation (~50 year) cycle of crisis. (This provides anecdotal support for the idea that there are Kondratieff waves of 50-60 years in economic time series.) A technical suggestion: Figure 17.1 shows changes in Institutional Investor ratings of sovereign credit. If a country's rating is already above 90%, it has much less room to move to the upside than one with a rating of 50%. A more sensitive chart might plot changes as a percentage of the room to shift.
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Augusto Romano
March 9, 2018
This book is an in-depth recount of many of the financial crises from the middle ages till the present. A must read for anyone interested in finance and investing. Highly recommended to browse through a book on economics, prior to this read, as This Time Is Different takes you on a journey in time with many technical terms. Not an easy read, but highly sophisticated in scope written by two great economists.
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A Google user
January 12, 2011
The authors have compiled one of the most comprehensive records of the various types of financial folly from hyperinflation to banking crises that I have ever seen. These records are in and of themselves valuable for policymakers to remind them to avoid the "this time is different" syndrome. The authors analyze the data in a broad macroeconomic way to point out when a particular financial crisis might occur. For example, they conclude that the massive influx of foreign capital into the United States prior to the current financial crisis should have been a warning flag to policymakers. From a broad prescriptive perspective, they suggest that international organizations should have better access to national economic data as well as publishing same. They lament the lack of transparency that national governments have with regard to their financial data. They further suggest that international organizations should have more power to regulate the financial affairs of nations. Although skimpy in terms of prescriptive detail, i.e. what regulatory regimes work best to manage a nation's financial affairs, the book is worth reading for the grand survey of financial folly which it describes.
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About the author

Carmen M. Reinhart is the Minos A. Zombanakis Professor of the International Financial System at the Harvard Kennedy School and former vice president and chief economist at the World Bank. Kenneth S. Rogoff is the Maurits C. Boas Chair of International Economics at Harvard University. He is the author of The Curse of Cash (Princeton) and a frequent commentator for NPR, the Wall Street Journal, and the Financial Times.

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