Book Reviews
Published by EH.NET (April 2010)
Carmen M. Reinhart and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.
463 pp. $35 (hardcover)
ISBN: 978-0-691-14216-6.
Reviewed for EH.NET by Richard Sylla, Department of Economics, Stern School of Business, New York University.

Publicado el 28-04-10

For financial economists and historians this is a welcome, timely, and seminal book. It is welcome because it fills a gap in the literature of financial crises. Earlier work is of two kinds, episodic and analytic in a non-quantitative way.

The episodic approach — literary and sometimes flowery accounts of major historical financial crises — began with McKay (1852) and continued down to Chancellor (1999), and also includes many studies of individual crises.

The analytic, non-quantitative approach, describing and analyzing the typical pattern of a
financial crisis and illustrating it with historical examples, is best exemplified by Kindleberger (1978, with several later updated editions). Missing until Reinhart and Rogoff filled the gap was a thorough study of the quantitative aspects of various categories of financial crises — inflation crises, currency crashes and debasements, external sovereign debt defaults, domestic debt defaults, and banking crises. Their quantitative analysis is based on a huge database covering sixty-six countries that recently accounted for some ninety percent of world economic product.

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