This Time Is Different

This Time Is Different

Eight Centuries of Financial Folly

Book - 2009
Average Rating:
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Publisher: Princeton : Princeton University Press, c2009
ISBN: 9780691142166
0691142165
Branch Call Number: 338.542 Rein
Characteristics: xlv, 463 p
Additional Contributors: Rogoff, Kenneth S

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LRS1969 Jan 06, 2015

Exceptional book, though very detailed (and somewhat dry) for a layman not versed in this subject. Clearly a book for ones who grasp the "historicity" of the subject, versus those - as shown by the political knee-jerk reaction of some of the reviewers who clearly are enamoured with Big Business (the first time that I have seen reviews that consisted of pasted URLs from opposing entities... in this case, from publications and organizations that epitomize the wants and desires from the very Big Banks, Big Business, and under regulated globalization of Trade that CAUSED this problem - and has done so throughout history (as shown by the authors).

For a superb newer book, I would recommend Roubini's "Crisis Economics".

And for an even newer exceptional book, "Capital in the 21st Century" by Thomas Piketty, a truly world renown global economist. HIGHLY recommended!

And, once again, would point out the statement of Santayana (and paraphrased by many afterwards, to include Churchill), "Those who do not remember history are doomed to repeat it".

s
StarGladiator
Sep 21, 2014

The commenter, LRS1969, seems a bit confused: Reinhart and Rogoff are pro-austerity, pro-Wall Street and are about confusing the masses - - securitization and the 1920s--style CDOs, called mortgage participation certificates, led to the Great Crash, just as securitization and CDOs and ultra-leveraging did this time as well! [Reinhart is a fellow at the Peterson Institute, for God's sakes!]
The commenter, delfon, is naturally quite correct. The misleading description . . .[in quotes] /// leading economists Carmen Reinhart and Kenneth Rogoff \\\ leading economists? By whose flakey standards? Their report that was destroyed by Thomas Herndon of UMass was grade-school crud and flotsam and if that's the best that Harvard can produce, faculty wise, it is time to shut down their economics department forever [if not the entire university, sure would drive down the crime stats]. Just read Rogoff's and Reinhart's austerity study [did I type STUDY????], my goodness!

d
delfon
Apr 23, 2013

http://www.economist.com/news/finance-and-economics/21576362-seminal-analysis-relationship-between-debt-and-growth-comes-under
___________________________
http://www.economist.com/blogs/buttonwood/2013/03/austerity

____________________________

http://www.economist.com/blogs/freeexchange/2013/01/government-debt

d
delfon
Apr 21, 2013

The authors crediblity is destroyed as is shown by this:
http://www.theglobeandmail.com/report-on-business/economy/sharp-eyed-student-takes-on-famed-economists-over-basic-errors---and-wins/article11366264/

r
RainbowRabbit
Feb 17, 2012

This is a good analysis, but a fairly dry book. Economists will appreciate the thoroughness of the research, but others may find it tough slogging. The points made are important, but will be lost to the general population. Someone should make a pop-oriented article of it for Mother Jones or Walrus.

v
vfryzek
Nov 15, 2011

This Book is geared for people with a Masters in Economics, More tables and charts than you can shake a stick at. If your looking for a narrative story type of description it's not here.

j
johnsankey
Nov 15, 2011

A technical book, very heavy going for the non-specialist. It's message is, however, critical for all to understand. When institutions lend more than they own, as all banks do today, any interruption of public confidence results in a crisis. When governments issue currency whose intrinsic value is less than its face value (all paper currency), any interruption of public confidence also results in a crisis.

These crises of confidence have been a recurring fact of economies all over the world for 800 years. Every time, authorities say "this time is different", assuming that they know more than their predecessors did. As the book details exhaustively, they are always wrong. It's essential that we all understand that financial meltdowns are inevitable whenever either of the two conditions mentioned exist, and prepare for them.

b
baldand
Oct 24, 2011

The scope of this book, covering economic crises of all sorts over most of the countries of the world over eight centuries, is truly Olympian. It is surely destined to be a business classic.

At the very end of the book the authors take a swipe at inflation targeting, suggesting it had given central bankers a false sense of invincibility, and that this led to the global recession of 2008 and after. However, this probably was due not so much to inflation targeting as such (and the US Federal Reserve Board has never been an inflation targeter) but with the inflation indicators used. The Bank of England and the European Central Bank targeted a CPI excluding owned accommodation (OA) and so completely insensitive to the housing bubbles that developed in Britain and in eurozone countries like Spain and Ireland. The US Fed looked at the personal expenditure price index ex food and energy, with an implicit rent measure of OA that was ludicrously insensitive to the big runup in US house prices that peaked in 2006.

The authors don't give the statistical sources of their data series in all cases. The Reserve Bank of New Zealand was the first inflation targeting central bank and the first central bank (in 1997) to adopt an optimal inflation indicator, a consumer price series with an OA component based on net purchases. I don't believe the authors' chart (Fig.15.1) that shows that New Zealand had a bigger percent change in real house prices over 2002-2006 than either Canada or the United States. New Zealand had the lowest house price inflation of any of the three countries, much lower than the US and slightly lower than Canada's.

These issues are more fully discussed in my paper "A Better Inflation Indicator".

Andrew Baldwin

b
BRENTHORYN
Dec 06, 2009

p98

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