This Time Is NOT Different: Lessons from the Financial Crisis

In their groundbreaking book, This Time Is Different: Eight Centuries of Financial Folly, Carmen Reinhart and Kenneth Rogoff argue that the financial crisis of 2008 was not a unique event, but rather a recurring pattern throughout history.

This Time Is Different: Eight Centuries of Financial Folly

by Carmen M. Reinhart

4.2 out of 5

Language	:	English
File size	:	15764 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
X-Ray	:	Enabled
Word Wise	:	Enabled
Print length	:	491 pages

FREE

Reinhart and Rogoff identify eight key factors that have led to financial crises in the past, and argue that these same factors are present in today's economy:

1. Credit booms: Periods of rapid credit growth often lead to financial crises. This is because when credit is easy to obtain, people and businesses tend to borrow more than they can afford.
2. Asset bubbles: Asset bubbles occur when the prices of assets, such as stocks or real estate, rise rapidly to unsustainable levels. This can lead to a financial crisis when the bubble bursts and asset prices collapse.
3. Excessive risk-taking: Financial institutions often take on too much risk in pursuit of profits. This can lead to losses that can destabilize the entire financial system.
4. Lax regulation: Weak regulation can allow financial institutions to take on too much risk and engage in risky behavior. This can increase the likelihood of a financial crisis.
5. Government bailouts: Governments often bail out financial institutions that are on the verge of collapse. This can lead to moral hazard, where financial institutions take on more risk because they know they will be bailed out if they get into trouble.
6. Twin deficits: When a country runs both a budget deficit and a current account deficit, it is more vulnerable to a financial crisis. This is because the country must borrow from abroad to finance its deficits, which can lead to a loss of confidence in the country's economy.
7. Exchange rate crises: A sudden devaluation of a country's currency can lead to a financial crisis. This is because it can make it more difficult for the country to repay its foreign debts and can lead to a loss of confidence in the country's economy.
8. Wars and natural disasters: Wars and natural disasters can also lead to financial crises. This is because they can disrupt economic activity and damage the financial system.

Reinhart and Rogoff argue that the financial crisis of 2008 was caused by a combination of these eight factors. They also argue that the same factors are present in today's economy, which means that another financial crisis is possible.

This Time Is Different is a timely and important book that provides valuable insights into the causes of financial crises. It is a must-read for anyone who wants to understand the risks facing the global economy.

Praise for This Time Is Different

"A tour de force. Reinhart and Rogoff have produced a masterful work that is both erudite and accessible. This Time Is Different is a must-read for anyone who wants to understand the causes of financial crises." —Paul Krugman, Nobel laureate in economics

"A brilliant and deeply researched book. Reinhart and Rogoff have provided us with a powerful lens through which to view the financial crisis of 2008 and the risks facing the global economy today. This Time Is Different is a must-read for policymakers, investors, and anyone who wants to understand the world we live in." —Larry Summers, former U.S. Treasury Secretary

"A timely and important book. Reinhart and Rogoff have sounded the alarm about the risks facing the global economy. This Time Is Different is a must-read for anyone who wants to avoid the next financial crisis." —Kenneth Rogoff, co-author of This Time Is Different

About the Authors

Carmen Reinhart is professor of economics at the University of Maryland. She is the co-author of This Time Is Different: Eight Centuries of Financial Folly and The Forgotten Depression: 1929-1933.

Kenneth Rogoff is professor of economics at Harvard University. He is the co-author of This Time Is Different: Eight Centuries of Financial Folly and The Curse of Cash.

This Time Is Different: Eight Centuries of Financial Folly

by Carmen M. Reinhart

4.2 out of 5

Language	:	English
File size	:	15764 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
X-Ray	:	Enabled
Word Wise	:	Enabled
Print length	:	491 pages

FREE