This Time Is Different

A comprehensive look at international financial crises that puts more recent economic meltdowns into perspective

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 breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes — from medieval currency debasements to today's subprime catastrophe.

Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much — or how little — we have learned. Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts — as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises.

While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur. An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.

This Time Is Different doesn't simply explain what went wrong in our most recent crisis. This book also provides a roadmap of how things are likely to pan out in the years to come... This Time Is Different is an important addition to the literature of financial history. — Edward Chancellor, Wall Street Journal

This Time Is Different [is a] landmark work on financial crises. — Megan McArdle, TheAtlantic.com

Unlike prior narrative accounts of market panics from other finance writers... Reinhart and Rogoff give us a data-driven study that is global in sweep but also a model of clarity. The authors package their notably non-hysterical analysis of the latest crisis in a large, self-contained section of the book inviting harried readers to skip right ahead to it. — Daniel Akst, CNNMoney.com