Product Description

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.

Product Details

• Amazon Sales Rank: #99 in Books
• Published on: 2009-09-11
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 496 pages

Features

• ISBN13: 9780691142166
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

Review
This Time is Different . . . is an unusually powerful bull detector designed to protect investors and taxpayers alike--eventually, at least, and provided the spirit is willing. . . . The book's most memorable passages--what the authors call its 'core life'--are to be found not in colorful stories about long-ago personalities, but rather in its various tables and figures. They take some time to comprehend, but any responsible citizen can and ought to consider they evidence they present. It is overwhelming.
(David Warsh Harvard Magazine )

A tour de force of quantitative analysis covering financial crises affecting 66 countries over the past 800 years, the book identifies pre-crisis patterns that recur with eerie consistency. This Time is Different is a must-read for anyone on the lookout for canaries in coal mines.
(Barron's )

Carmen Reinhart and Kenneth Rogoff have delivered a powerful and eloquent statement. . . . Reinhart and Rogoff have done an extraordinary job in putting together statistics on government debt--a task that economic historians should have done long ago but shied away from because of the difficulties of defining 'government', which is often complex and multi-layered.
(Harold James The American Interest )

Everyone working on economic policy should own This Time is Different and open it for a bracing blast of sobriety when things seem to be going well.
(Greg Ip Washington Post )

Financial folly, economists Carmen Reinhart and Kenneth Rogoff show in this groundbreaking book, knows no boundaries and has no expiration date. . . . For a book built around numbers, This Time is Different makes for surprisingly good reading. The authors are well aware that human nature is at the heart of the disasters they document, and they enliven the text with brief and amusing accounts of charlatans and cheats.
(Paul Wiseman USA Today )

Having studied mountains of economic data during the past eight centuries, the authors insightfully point out the highly repetitive nature of financial crises resulted from a dangerous mix of hubris, euphoria and amnesia.
(Shanghai Daily )

Professor Rogoff and his longtime collaborator Carmen Reinhart . . . know more about the history of financial crises than anyone alive. The pair have just published their broad survey of financial crises, This Time is Different. In an era when most 'analysts' rely on maybe 30 or 40 years' worth of financial history--and then only that of the U.S.--the authors' knowledge of financial crises and government bond defaults going back to the Spanish empire and before offers a richer perspective.
(Brett Arends Wall Street Journal )

Reinhart and Rogoff have compiled an impressive database, which covers eight centuries of government debt defaults from around the world. They have also collected statistics on inflation rates from every country where information is available and on banking crises and international capital flows over the past couple of centuries. This lengthy historical study gives what they call a 'panoramic view' of the unending cycle of boom and bust, showing how claims that 'this time is different' are invariably proven wrong. . . . This Time Is Different doesn't simply explain what went wrong in our most recent crisis. This book also provides a roadmap of how things are likely to pan out in the years to come. . . . This Time Is Different is an important addition to the literature of financial history.
(Edward Chancellor Wall Street Journal )

Rogoff and Reinhart . . . provide an eye-opening look at the cycles of boom and bust and how governments deal with those cycles.
(Arkansas Business )

The authors use copious amounts of data . . . to make the compelling case that any well-informed person should have seen the Great Recession coming. The essence of their book is that while financial crises come in different varieties, they are not mysteriously born of undersea earthquakes, but frequently occurring events that can be spotted and even controlled if politicians and regulators know what to look for.
(Devin Leonard New York Times )

The authors use copious amounts of data ... to make the compelling case that any well-informed person should have seen the Great Recession coming. The essence of their book is that while financial crises come in different varieties, they are not mysteriously born of undersea earthquakes, but frequently occurring events that can be spotted and even controlled if politicians and regulators know what to look for. -- Devin Leonard New York Times Reinhart and Rogoff have compiled an impressive database, which covers eight centuries of government debt defaults from around the world. They have also collected statistics on inflation rates from every country where information is available and on banking crises and international capital flows over the past couple of centuries. This lengthy historical study gives what they call a 'panoramic view' of the unending cycle of boom and bust, showing how claims that 'this time is different' are invariably proven wrong... This Time Is Different doesn't simply explain what went wrong in our most recent crisis. This book also provides a roadmap of how things are likely to pan out in the years to come... This Time Is Different is an important addition to the literature of financial history. -- Edward Chancellor Wall Street Journal Professor Rogoff and his longtime collaborator Carmen Reinhart ... know more about the history of financial crises than anyone alive. The pair have just published their broad survey of financial crises, This Time is Different. In an era when most 'analysts' rely on maybe 30 or 40 years' worth of financial history--and then only that of the U.S.--the authors' knowledge of financial crises and government bond defaults going back to the Spanish empire and before offers a richer perspective. -- Brett Arends Wall Street Journal [E]ssential reading ... both for its originality and for the sobering patterns of financial behaviour it reveals. Economist The four most dangerous words in finance are 'this time is different.' Thanks to this masterpiece by Carmen Reinhart at the University of Maryland and Kenneth Rogoff of Harvard, no one can doubt this again... The authors have put an immense amount of work into collecting the data financial institutions needed if they were to have any chance of making quantitative risk management work. -- Martin Wolf Financial Times Everyone working on economic policy should own This Time is Different and open it for a bracing blast of sobriety when things seem to be going well. -- Greg Ip Washington Post [A] fine new history of financial debacles. -- Daniel Gross Newsweek Wouldn't it be nice to have $1,000 for every time a pundit proclaims an era of endless prosperity, consigning booms and busts to the dumpster of history? The next time you hear that canard (and you will) pour yourself a single malt and dip into Carmen M. Reinhart and Kenneth S. Rogoff's landmark study, This Time Is Different. Wherever you open the book, you'll find proof that debt-fueled expansions have ended in financial ruin for hundreds of years... The result is a visual history laid out in beguilingly simple graphs and tables, making the book both definitive--a must read for professors and investors--and accessible to a wider audience. -- James Pressley Bloomberg News Carmen Reinhart and Kenneth Rogoff have delivered a powerful and eloquent statement... Reinhart and Rogoff have done an extraordinary job in putting together statistics on government debt--a task that economic historians should have done long ago but shied away from because of the difficulties of defining 'government', which is often complex and multi-layered. -- Harold James The American Interest Unlike prior narrative accounts of market panics from such finance writers as Charles Kindleberger and Edward Chancellor, Reinhart and Rogoff give us a data-driven study that is global in sweep but also a model of clarity. The authors package their notably nonhysterical analysis of the latest crisis in a large, self-contained section of the book inviting harried readers to skip right ahead to it. -- Daniel Akst CNNMoney.com A tour de force of quantitative analysis covering financial crises affecting 66 countries over the past 800 years, the book identifies pre-crisis patterns that recur with eerie consistency. This Time is Different is a must-read for anyone on the lookout for canaries in coal mines. Barron's This is certainly one of the must-read books of the year. -- Arnold Kling Econlog.com Rogoff and Reinhart ... provide an eye-opening look at the cycles of boom and bust and how governments deal with those cycles. Arkansas Business [A] valuable new book. Idaho Statesman Having studied mountains of economic data during the past eight centuries, the authors insightfully point out the highly repetitive nature of financial crises resulted from a dangerous mix of hubris, euphoria and amnesia. Shanghai Daily

The credit crunch of 2007 became the financial crash of 2008 and the recession of 2009. But there has been much debate about the scale of this crisis, and how it ranks against previous events. Reinhart and Rogoff have produced the most detailed study yet of financial crises, going back as far as 12th-century China. . . . [This Time is Different] will be a vital source of reference in debates on the causes and consequences of financial crises. By cataloguing so thoroughly every known instance of financial crisis, it performs a significant service and opens up new lines of inquiry.
(Andrew Gamble New Statesman )

The four most dangerous words in finance are 'this time is different.' Thanks to this masterpiece by Carmen Reinhart at the University of Maryland and Kenneth Rogoff of Harvard, no one can doubt this again. . . . The authors have put an immense amount of work into collecting the data financial institutions needed if they were to have any chance of making quantitative risk management work.
(Martin Wolf Financial Times )

This is certainly one of the must-read books of the year.
(Arnold Kling Econlog.com )

Unlike prior narrative accounts of market panics from such finance writers as Charles Kindleberger and Edward Chancellor, Reinhart and Rogoff give us a data-driven study that is global in sweep but also a model of clarity. The authors package their notably nonhysterical analysis of the latest crisis in a large, self-contained section of the book inviting harried readers to skip right ahead to it.
(Daniel Akst CNNMoney.com )

Wouldn't it be nice to have $1,000 for every time a pundit proclaims an era of endless prosperity, consigning booms and busts to the dumpster of history? The next time you hear that canard (and you will) pour yourself a single malt and dip into Carmen M. Reinhart and Kenneth S. Rogoff's landmark study, This Time Is Different. Wherever you open the book, you'll find proof that debt-fueled expansions have ended in financial ruin for hundreds of years. . . . The result is a visual history laid out in beguilingly simple graphs and tables, making the book both definitive--a must read for professors and investors--and accessible to a wider audience.
(James Pressley Bloomberg News )

[A] fine new history of financial debacles.
(Daniel Gross Newsweek )

[A] valuable new book.
(Idaho Statesman )

[E]ssential reading . . . both for its originality and for the sobering patterns of financial behaviour it reveals.
(Economist )

Review
This is quite simply the best empirical investigation of financial crises ever published. Covering hundreds of years and bringing together a dizzying array of data, Reinhart and Rogoff have made a truly heroic contribution to financial history. This single marvelous volume is worth a thousand mathematical models.
(Niall Ferguson, author of "The Ascent of Money: A Financial History of the World" )

From the Inside Flap

"This is quite simply the best empirical investigation of financial crises ever published. Covering hundreds of years and bringing together a dizzying array of data, Reinhart and Rogoff have made a truly heroic contribution to financial history. This single marvelous volume is worth a thousand mathematical models."--Niall Ferguson, author of The Ascent of Money: A Financial History of the World

"This Time is Different is terrific, for it gives just the perspective we need on the current world economic crisis. People can't expect to understand the current crisis without some in-depth look at past crises. That is exactly what this excellent and timely book provides."--Robert J. Shiller, author of Irrational Exuberance and coauthor of Animal Spirits

"You will be hard pressed to find a more comprehensive and insightful analysis of financial crises. Reinhart and Rogoff's superb book is a must-read for anyone looking to understand past and present crises, as well as navigate those of tomorrow."--Mohamed El-Erian, author of When Markets Collide

"This Time Is Different is a tremendously exciting, topical, and controversial book on the history of debt and default. This one belongs on everyone's shelf."--Barry Eichengreen, author of The European Economy since 1945

Customer Reviews

Prodigious and full of gallows humor
Rogoff and Reinhart, two very substantive (and, I might add, earnest) economists, have produced a prodigious work which will be read and studied for years. They have gathered mountains of data from primary and secondary sources and reduced it to dozens of charts and graphs, a heroic work in its own right. Their intention, God bless 'em, is to lay out the follies that have led to economic/financial crises over the last eight centuries. Their findings: humans have not learned from past mistakes. The title is ironic and is worthy of Peter DeVries.

The authors say it is "almost comical" that no governments reveal their true financial condition today, nor have they done so in the past. The lack of transparency and the shenanigans that go on behind the curtains contribute, of course, to the human suffering that ensues in crisis after crisis.

One needs to find this book comical if one is not to slip into a permanent depression about the utter failure of national leaders to address shortcomings in national domestic and foreign economic policies in order to avoid systemic crises. No one has, from the 13th century onward, anywhere in the world.

The authors persist in saying that they hope their monumental effort will lead to an examination by policymakers of past mistakes and help them avoid future mistakes. I say, "Good luck with that." In my opinion, this book ranks with the complete works of Shakespeare in illuminating the human condition. Or Bruegel, or Beethoven. It will not bring about change, but it will entertain in a deeply satisfying way.

Explaining the Second Great Depresson and Its Potential Aftermath
Be prepared for a very sobering and complete review of eight centuries of financial crises, complete with charts and graphs that even those who fell asleep in the Macro 101 in college should be able to understand. This book is worth reading in its entirety, but chapters 13 to 17, in which the authors draw important lessons from the 800 years of financial folly for the present course of the "Second Great Contraction of 2007" and its aftermath, make this volume well worth the price.

Also, be prepared for some sobering analysis of the effectiveness of central banks and government policymakers in addressing economic crisis (yes, regrettably, still not very effective even with the benefit of 800 years of history and analysis to draw on). You will learn why This Time is Ultimately Not That Different in so many ways. Ken Rogoff worked at both the Fed and the IMF so he is in a unique position to evaluate the global scope of the 2nd Great Depression in modern history, and it is the very global nature of this event that leads him to conclude that the aftermath with be long-lasting and have profound effects on the global economy for many years to come.

While documenting the fiscal policy response to the Second Great Contraction of 2007, including the massive global government bailouts in the banking sector, Rogoff points out that the size and long-term impact of these measures, while profound, may be dwarfed by the effects on the U.S. national deficit and national debt of reduced Federal tax revenues during the global downturn. With such high levels of debt and limited means to reduce government expenditures to compensate for sharp reductions in tax revenues, the ultimate effect may be a debasing of the U.S. dollar by the Fed, producing a period of increased inflation or stagflation.

The earlier chapters describing periods of hyperinflation, bank and sovereign defaults throughout history are fascinating, leading up to the payoff in the final chapters, in which one can draw one's own conclusions about what course this most recent crisis will take and just as importantly, how policymakers are liable to miscalculate once again. The Federal money-printing presses around the world are in high gear once again, more automated and sophisticated than ancient regal sovereigns clipping coins and extracting gold and silver from the royal coinage to finance their realms.

Proving once again that history doesn't always repeat itself, but it does rhyme.

Unfortunately, Reruns Are Already Starting!
Reinhart and Rogoff's book provides a quantitative history of financial crises derived from over 600 years and 66 nations. The basic message from all their data is that there are remarkable similarities in today's financial crises with experience from other countries and nations. The common theme is that excessive debt accumulation by government, banks, corporations, or consumers often brings great risk. It makes government look like it is providing greater growth than it is, inflates housing and stock prices beyond sustainable levels, and makes banks seem more stable and profitable than they really are. Large-scale debt buildups make an economy vulnerable to crises of confidence - especially when the debt is short-term and needs to be refinanced (the usual case).

Reinhart and Rogoff go on to conclude that most of these booms end badly. Outcomes include sovereign defaults (government fails to meet payments on its debt), banking crises (heavy investment losses, banking panics), exchange rate crises (Asia, Europe, Latin America in the 1990s), high inflation (a de facto default), and combinations of the preceding (1930s, today).

What did the authors learn from their data digging? Severe financial crises share three characteristics: 1)Declines in real housing prices average 35%, stretched out over six years, while equity prices fall an average 56% over 3.5 years. 2)The unemployment rate rises an average of 7 percentage points during the down phase (average length = four years). Output falls more than 9% over a two-year period. 3)Government debt tends to explode, an average 86% in real terms. The biggest driver of this debt explosion is the collapse in tax revenues; counter-cyclical fiscal policy efforts also contribute, as well as spiking interest rates.

Reinhart and Rogoff also identify what they find to be the best and worst (pronouncements from the Federal Reserve, U.S. Treasury heads, and more than a few 'successful' academics and stock-pickers) early warning indicators of crises. Finally, the authors warn that premature self-congratulations on early successes in correcting a banking crisis may lead to complacency and an even worse state of affairs.

The 'good news' is that Reinhart and Rogoff have provided a detailed and credible accounting of past experiences. The 'bad news' is that despite the authors' scholarly and intense efforts, "This Time is Different" is not likely to sway many minds for two reasons. 1)The book is too much of a scholarly tome to become widely read, and there are too many self-serving 'think-tanks' offering contrarian opinions. Others, more data-driven, will point out that most of "This Time Is Different" is drawn from earlier days and non-U.S. nations, and thus of limited applicability to the U.S. today. 2)Despite recent disproof of claims that government has mastered the economic cycle via Federal Reserve fine-tuning and counter-cyclical government spending, and that 'the old rules of valuation no longer apply,' we're back blowing bubbles. Today's MSNBC headline reads 'New Market Bubble May be Brewing,' the 'Greenspan Put' (government will bail out falling markets, while allowing soaring ones) continues, no action has been taken to rein in Wall Street gambling and unwarranted bonuses, financial institutions believed 'too big to fail' are bigger than ever, and 2010 election pressures will undoubtedly auger for continued easy money, inflating ourselves out of debt, and increased debt at all levels.