This Time Is Different

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, 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.

"Reinhart and Rogoff's book belongs to the tradition of studies that appear in the middle of a crisis but it manages to keep its spine above water because of its historical depth and systematic rigour."---Sakis Gekas, Dublin Review of Books

Auteur

Carmen M. Reinhart & Kenneth S. Rogoff

Texte du rabat

"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

"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

"I would say that her [Carmen Reinhart's] book with Ken Rogoff on debt crises and financial crises is an extraordinary piece of work."--Federal Reserve Chairman Ben Bernanke, speaking before the House Budget Committee (6/9/2010)

"The most important authorities probably in the world now on financial crashes are Kenneth Rogoff and Carmen Reinhart. . . . And I read it [This Time is Different]."--Former President Bill Clinton, speech at Youngstown, OH, October 31, 2012

"A classic."--Nouriel Roubini

Résumé

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.

Contenu
LIST OF TABLES xiii LIST OF FIGURES xvii LIST OF BOXES xxiii PREFACE xxv ACKNOWLEDGMENTS xxxvii PREAMBLE: SOME INITIAL INTUITIONS ON FINANCIAL FRAGILITY AND THE FICKLE NATURE OF CONFIDENCE xxxix PART I: Financial Crises: An Operational Primer 1 Chapter 1: Varieties of Crises and Their Dates 3 Crises Defined by Quantitative Thresholds: Inflation, Currency Crashes, and Debasement 4 Crises Defined by Events: Banking Crises and External and Domestic Default 8 Other Key Concepts 14 Chapter 2: Debt Intolerance: The Genesis of Serial Default 21 Debt Thresholds 21 Measuring Vulnerability 25 Clubs and Regions 27 Reflections on Debt Intolerance 29 Chapter 3: A Global Database on Financial Crises with a Long-Term View 34 Prices, Exchange Rates, Currency Debasement, and Real GDP 35 Government Finances and National Accounts 39 Public Debt and Its Composition 40 Global Variables 43 Country Coverage 43 PART II: Sovereign External Debt Crises 49 Chapter 4: A Digression on the Theoretical Underpinnings of Debt Crises 51 Sovereign Lending 54 Illiquidity versus Insolvency 59 Partial Default and Rescheduling 61 Odious Debt 63 Domestic Public Debt 64 Conclusions 67 Chapter 5: Cycles of Sovereign Default on External Debt 68 Recurring Patterns 68 Default and Banking Crises 73 Default and Inflation 75 Global Factors and Cycles of Global External Default 77 The Duration of Default Episodes 81 Chapter 6: External Default through History 86 The Early History of Serial Default: Emerging Europe, 1300-1799 86 Capital Inflows and Default: An "Old World" Story 89 External Sovereign Default after 1800: A Global Picture 89 PART III: The Forgotten History of Domestic Debt and Default 101 Chapter 7: The Stylized Facts of Domestic Debt and Default 103 Domestic and External Debt 103 Maturity, Rates of Return, and Currency Composition 105 Episodes of Domestic Default 110 Some Caveats Regarding Domestic Debt 111 Chapter 8: Domestic Debt: The Missing Link Explaining External Default and High Inflation 119 Understanding the Debt Intolerance Puzzle 119 Domestic Debt on the Eve and in the Aftermath of External Default 123 The Literature on Inflation and the "Inflation Tax" 124 Defining the Tax Base: Domestic Debt or the Monetary Base? 125 The "Temptation to Inflate" Revisited 127 Chapter 9: Domestic and External Default: Which Is Worse? Who Is Senior? 128 Real GDP in the Run-up to and the Aftermath of Debt Defaults 129 Inflation in the Run-up to and the Aftermath of Debt Defaults 129 The Incidence of Default on Debts Owed to External and Domestic Creditors 133 Summary and Discussion of Selected Issues 136 PART IV: Banking Crises, Inflation, and Currency Crashes 139 Chapter 1…