This Time Is Different: Eight Centuries of Financial Folly
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This Time Is Different: Eight Centuries of Financial Folly

3.78 of 5 stars 3.78  ·  rating details  ·  2,754 ratings  ·  180 reviews
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 breakthr...more
ebook, 512 pages
Published September 11th 2009 by Princeton University Press (first published September 1st 2009)
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Whitaker
OMFG!! This was originally four stars. I was super-impressed by the fact that their conclusions were supported by data underlying the research. Guess what? That was NOT the case! When they finally agreed to release their data sets and other economists tried to replicate their results with their data, they found the following:
We replicate Reinhart and Rogoff and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious erro
...more
Jason
This book’s an A- graduate paper glorified into 400+ pages. It has impressive academic rigor, an appendices & reference list as long as the body, and charts galore. Unfortunately it’s written as blandly as Ben Stein speaks. I was jazzed to find this at the library, but let down.

Mercifully, in the preface the authors tell us that the book is organized so you can skip to the last 4 chapters if you‘re interested only with “The Second Great Contraction” which began in the US late 2007. They warn...more
Hadrian
If you're going to release a seminal report on the relationship between debt and GDP, you had better make damn sure that you don't fuck up your Excel charts.

Now that debt/GDP growth isn't as strongly correlated anymore, does that mean people will stop pushing austerity policies?

http://www.peri.umass.edu/fileadmin/p...
Frank Stein
As almost everyone who reviews this book mentions, this is truly an impressive piece of work. The authors, Carmen Reinhart and Kenneth Rogoff, have assembled an amazing history of government defaults, hyperinflations, banking crises, and currency crises for the past 800 years in dozens of countries spanning the globe. They didn't, understandably, compile a narrative of these hundreds of independent events, but coded them into a massive statistical database with which they could compare the relat...more
Gordon
This book is the current darling of the financial set, and I understand it has become required reading by economists, bankers, policy-makers and the more thoughtful financial pundits alike. That’s a rare feat. The book assembles a vast data set on financial crises, from many countries both developed and emerging, and reduces it to a mass of charts and graphs along with text. The title, as you might guess, refers to the fact that “this time is different” always turn out to be famous last words –...more
Richard
Aug 21, 2011 Richard rated it 2 of 5 stars  ·  review of another edition
Recommends it for: economists, statisticians, professional investors
It might be unfair for me to rate this book (giving it 2 stars). My rating is subjective. This isn't the book I was looking for, and that isn't the authors' fault. So please view my rating with that in mind.

This book is clearly aimed at an academic or professional economic audience. The book is chock full of tables and graphs. The amount and quality of data is impressive.

As for the writing style, Alan Greenspan would be proud. Here is a typical sentence (pp 192-3): "Interpreting the (uncondition...more
AC
The thesis of this book is important, but I cannot say it is worth actually "reading" very closely -- The gist can be extracted in a short time -- and the charts/data scanned. Only time will tell whether the authors' fears are to be realized...

There's an old market adage that bears almost ALWAYS have the better argument; but that bulls, when the day is done, are most often right.... Of course, being bullish today is a relative concept. As Doug Henwood says, "flat is the new up".


This book, to my...more
John
Well, this is one of the few books I tried to finish but couldn't.
First I downloaded it from Audible.com. However, this book has a ton of graphs and tables. The reader of the audiobook frequently makes statements like "As can be seen from table 2.2..." The listener is unable to "see" table 2.2 as no tables or illustrations are provided either with the download or on the internet. So that's frustrating. Then I checked the book out in hardcopy from the library so as to be able to see the tables,...more
Nancy
Don't curl up by the fire intending to read this book.

For most people reading this book would be a real slog. It is dense and full of charts and tables. However, picking it up, opening it to an interesting looking chapter and examining the tables and charts can be very engaging. If you get bogged down, don't give up. Pick it up from time to time and read a section. You'll learn a lot about finance.

While I did not read the whole book I got some good pointers from it. One is that there was never a...more
Brion O'quigley
Another reviewer pointed out that some of the analysis in the book is based on faulty data. Be that as it may, the book still provides generic findings about the financial cycle that are still valid. It is a cogent analysis of hundreds of years of financials crises. Contrary to what the Fed continuously repeats, it is possible to predict financial cycles and this book proves it by examining how bubbles have burst since the invention of money. It provides an excellent explanation of the predictab...more
getAbstract
Sobering study of fiscal failures

Every so often, experts sucker people into bidding up the prices of stocks or real estate because they announce that the economy has fundamentally changed. As the aftermath of the real estate bubble illustrates, the basics of economics don’t really change, no matter what fantasies people come to believe. Economics professors Carmen M. Reinhart and Kenneth S. Rogoff present a thorough historical and statistical tour of financial hubris through the centuries, a po...more
linhtalinhtinh
I was about to say unratable. Not because this book is a classic, nor because it is too scholarly for me to apprehend. The reason is that I feel like it is too much like a draft. The book is full of graphs, boxes, tables, albeit with quite detailed descriptions and brief explanations. Put in another way, I feel like it is a preliminary analysis, where you throw out all raw materials you have, graphs, summaries, descriptives, and only with a very rough idea of what you are going to say. This time...more
Ed
This time is never different: after any prolonged period of financial calm, policy makers and their advisers either forget history or invent reasons to believe that historical experience is irrelevant so the cycle of overvalued assets, huge trade imbalances and rapid acquisition of debt begins with the cheerleaders in academia and the business community telling each other (and everyone else) that this time the old valuation rules don't apply; we are smarter, have better systems and have learned...more
Jay
This is the most important book that no one will ever read. The data provided is enormous, and presented in a manner that only economists would truly grasp. I know of few people that could fully grasp the information provided in the work, myself included at times. However, the information is sobering and necessary. Nothing in our current economic situation is new, and this work proves the point that this time is not different. People can attempt to read into this work and slant that data anyway...more
Phil
It's data. Hooray data!

The authors aren't trying to write a book for a wide audience. It's mathematical and dry; that's the point. I hold a Bachelor's degree in Economics from a top-25 university--my coursework included International Finance and Econometrics--and I still found this book difficult. It's worth it if you are interested in economics and you don't get nervous when the authors don't apologize for being experts. A relatively simple passage from this book is something like, "A country c...more
Liam
Poyais -- fictional Latin American country issues sovereign debt in the 1820s debt boom (93)

"Recognizing the significance of domestic debt can go a long way toward resolving the puzzle of why many countries default on (or restructure) their external debts at seemingly low debt thresholds. In fact, when previously ignored domestic debt obligations are taken into account, fiscal duress at the time of default is often revealed to be quite severe." (119)

"The incidence of banking crises proves to be...more
Amrahs Jarihd
A veritable tome of a book, with more than 100 pages of data appendices and references. It packs a lot of authority and will be influential for years to to come but most readers can easily skip more than two-thirds of the book - the first four sections - without missing much and without losing the crux of the message. Financial crises in the shape of sovereign default, domestic debt default, banking crisis, currency crashes and inflation have happened with alarming frequency and regularity in bo...more
Rendall
I loved the first 15 pages, then hit a dense, intractable wall. I gave it a good go. I'll try again someday, but with such interesting things to read and a short life, why waste time struggling with a book you're not enjoying?
Chris Elkjar
This book is fantastic. I'd been looking for some type of actual statistical analysis of banking / currency / default crises and this covers everything I wanted. While I still don't believe that countercyclical interventions can do anything to prevent the business cycle this book does paint some rather interesting pictures about how we are never exempt from risk and how history repeats itself very often.

The main thesis covers the myth that "established" countries are not susceptible to the same...more
Aharon
If you read only one book this year on serial sovereign defaults in the 14th through 18th centuries, make it this one.
Rogier Potter van loon
The book is written in a rather boring and technical manner, as if it were an academic article. This would be okay, if it weren't for the fact that everything that's shown is descriptive statistics. Every other page seems to mention how they have this 'unique new big dataset' and how this allows for new insights and analyses, but these analyses are never shown. The book is really just one big description of their dataset. Nowhere in the book is there a convincing case, for example, that the 'Thi...more
Rick
Somewhat dry, but meticulously researched. Many graphs. This book puts financial crises into perspective. They've been going on for a long, long time. Somehow, the world manages to soldier on. This book is a good remedy for those with short memories who shudder at the prospect of currency flight or national debt default, thinking this surely portends the end of days. The authors do point out that data on states, counties, and large communities should be looked at, since certain regions, like the...more
Harry Barnett
A more appropriate title for the book would have been "This Time is Different: Four Hundred Pages of Quantitative Analysis". The author gets it right in the Preface when he calls the book "a quantitative history of financial crises in their various guises". He goes on to say "earlier works take an essentially narrative approach, fortified by relatively sparse data". Reinhart and Rogoff provide you with data overload and no narrative. This results in some pretty dry reading. If you read and enjoy...more
Mikeg53
A thought provoking analysis of economic activities (inflation, deflation, currency collapses, debt defaults, currency crises, root causes and common indicators prior to these events, average recovery times)over eight centuries occurring in both developed and developing countries, this book provides a rigorous academic analysis of these economic events. It's an excellent resource for those seeking to understand economic history and design their own investment philosophies based on objective anal...more
Adam
Densely informative with very little analysis. The breadth of the data compiled for this book is impressive and Reinhart and Rogoff do find some interesting things, but the tone throughout is dry fact delivering. I got reasonably well informed about the recurrence of financial crises over time, but the authors avoid prescriptive advice at every turn. They recommend not having too much debt (though hedge all over the place about what level of debt would constitute too much - too be fair this leve...more
Mac
“This Time is Different” is essentially a commentary on a series of charts and documents going back impressively far into economic history in order to examine why financial crises occur, and why each one is basically a result of the same forces. The “this time is different” mindset apparently plagues every generation: the assumption that subsequent thinkers have learned from those old-timers’ mistakes and are doing it differently, even though it’s really the same behavior.

This is interesting, an...more
Nilesh
This is about the best book on financial crises in a long time. This book does not talk about the history of past financial turmoils in the smooth, story-telling ways of Kindleberger. It certainly does not have a Talebian harangue on what is wrong with almost everyone who has been positively referenced in history books of the world. The discourse on individual episodes of economic or financial events is nearly non-existent and the book does not try to pass judgement on any individuals even remot...more
Ian Robertson
This book is different; already an important and oft-cited contribution to our understanding of financial crises, it will likely endure as both a turning point and a benchmark for economists and policymakers alike. Reinhart and Rogoff compile and synthesize centuries of economic data, draw both facts and inferences, and offer some predictions as to how the global financial crisis that began in 2006 with the US housing collapse might continue to unfold. A truly remarkable and important work. It r...more
Ray
Ninety plus years, the Roaring Twenties, Prohibition, the First Great Contraction, World War II and a few collateral armed engagements, a credentialed doctorate in Economics, 38 years college teaching, the Second Great Contraction plus minor events also cover the Nine Decades of governmental debt and incredible associated financial policy experimentation and maladministration--these things combine and contrive to offer a personal perspective on this book. And so, from that perspective--personal...more
Jason
What is the history of financial crises? Why to they occur? Are they common? In this book, Reinhard and Rogoff assiduously review the history of government defaults and crisis of the financial system. Their data on government default is truly astounding. They document instance of government default in multiple ways: renegotiating the terms of a loan, failing to pay investors, and reducing the value of their debt through inflation or devaluation. Although defaults on external debt (from foreign i...more
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“These findings on capital flow bonanzas are also consistent with other identified empirical regularities surrounding credit cycles. Mendoza and Terrones, who examine credit cycles in both advanced and emerging market economies using a very different approach from that just discussed, find that credit booms in emerging market economies are often preceded by surges in capital inflows. They also conclude that, although not all credit booms end in financial crisis, most emerging market crises were preceded by credit booms.” 0 likes
“Of course, the problems of external default, domestic default, and inflation are all integrally related. A government that chooses to default on its debts can hardly be relied on to preserve the value of its country’s currency.” 0 likes
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