Jordan Peacock's Reviews > This Time Is Different: Eight Centuries of Financial Folly

This Time Is Different by Carmen M. Reinhart
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Jul 19, 11

Read from July 14 to 19, 2011 — I own a copy

‎*Very* data heavy, but they walk you through it pretty well. A few highlights are that:

a) on the long view, defaults, inflation and other crisis are quite common, and sovereign defaults on external debt are particularly common amidst emerging market economies.
b) in the economics literature, little to nothing has been done to analyse domestic defaults, except as bailouts relate to external defaults, and what data they were capable of compiling seems to indicate that domestic defaults are more common, and that domestic debt is far more highly leveraged than external debt.
c) external defaults are largely history for nations that have had international markets for a couple centuries, but banking crisis persist and their effects scale; they affect wealthy and poor nations proportionately, for the most part.
d) asset devaluation tends to precede banking crisis, with housing depressions tending to average 4-6 years. As with domestic defaults, very little research appears to have been done in these areas until recently. Housing pricing correlate with banking crises.
e) International financial regulatory bodies & frameworks are warranted.
f) "central government debt typically increas[es] by about 86 percent on average (in real terms) during the three years following the crisis".

This book is ideal for the more hardcore economics geeks (Nathanael Snow), but they're released most of their data sets so expect more interesting analyses from them in the future.
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07/16/2011 page 73
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