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|This Time is Different: Eight Centuries of Financial Folly, by Carmen M. Reinhart and Kenneth Rogoff. Throughout history, financial excesses have almost always been accompanied by the justification, “this time is different.” In this highly detailed and scholarly work, Reinhart and Rogoff demonstrate that very little is truly different and that the old rules of booms and busts still apply. Drawing on some 800 years of data spanning 66 nations, the authors review dozens of financial debacles ranging from currency debasements, deflations, old-fashioned investment bubbles, hyperinflation and more. They describe not only the events leading up to the crises but also the financial impacts that tend to follow in the aftermath. It is on this latter topic that Reinhart and Rogoff break new ground, offering insights into the similar patterns of unemployment, government revenues, equity prices and capital investment in the wake of financial crises. Because it is such an exhaustive study, it does read like a textbook at times. Further, the book is nearly silent on what policymakers wish to know most—how to ameliorate the effects of financial debacles and hasten recovery. Still, this is an important book that is likely to impact economic policy globally for years to come.||
"[A] terrific book."
Andrew Ross Sorkin, New
[O]ne of the most important economic books of 2009."
Jon Hilsenrath, Wall Street Journal
Martin Wolf, Financial Times