Book Reviews

Abstract

Michael J. Boskin of Stanford University reviews “This Time Is Different: Eight Centuries of Financial Folly” by Carmen M. Reinhart, Kenneth S. Rogoff,. The EconLit Abstract of the reviewed work begins “Provides a quantitative history of financial crises in their various guises. Discusses varieties of crises and their dates; debt intolerance--the genesis of serial default; a global database on financial crises with a long-term view; a digression on the theoretical underpinnings of debt crises; cycles of sovereign default on external debt; external default through history; the stylized facts of domestic debt and default; domestic debt--the missing link explaining external default and high inflation; domestic and external default--which is worse and who is senior; banking crises; default through debasement--an “old world favorite”; inflation and modern currency crashes; the U.S. subprime crisis--an international and historical comparison; the aftermath of financial crises; the international dimensions of the subprime crisis--the results of contagion or common fundamentals?; composite measures of financial turmoil; and reflections on early warnings, graduation, policy responses, and the foibles of human nature. Reinhart is Professor of Economics at the University of Maryland. Rogoff is Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University. Name and subject indexes.”