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This Time Is Different: Eight Centuries of Financial Folly
[media]http://media.cceia.org/carnegie/video/20091022_ThisTime_Full.mp4[/media]
Transcript:
Introduction
JOANNE MYERS: Good afternoon. I'm Joanne Myers, Director of Public Affairs Programs. On behalf of the Carnegie Council, I'd like to thank you all for joining us.
Our discussion today is about the economy. We are delighted to have as our speakers two leading economists whose work has been influential in the policy debate concerning the current financial crisis, Carmen Reinhart and Kenneth Rogoff.
They will be talking about their book, This Time Is Different: Eight Centuries of Financial Folly, which, from all accounts, is said to provide the best empirical investigation of the financial crisis to date.
It has been a bad year for the economy. How many times have you heard, "No one was prepared for what has happened," or "It was impossible to see this coming"?
Many economists, especially those caught off-guard, have even claimed that this situation is so unusual that it bears little similarity to anything that has gone before.
Not so, say our speakers. In fact, it is just the opposite. As the ironic title of their book indicates, "This time is different" turns out to be a mantra that Professors Reinhart and Rogoff have discovered to be wrong.
How did they come to this conclusion? In researching their book, our speakers covered 66 countries across five continents, to give us a comprehensive look at the varieties of financial crises. In doing so, they guide us through eight centuries of government defaults, banking panics, and inflationary spikes, from medieval currency debasements to today's subprime catastrophe.
They provocatively argue that financial combustions are universal rites of passage for emerging and established markets. As their statistics show, financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. In their exhaustive research, they examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debt, as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises.
Their data shows that countries do weather their financial storms, but short memories make it all too easy for crises to reoccur, and they will happen again with startling regularity everywhere.
As our guests remind us, we have been here before. If so, we might ask, is it ignorance or maybe arrogance that has prevented us from seeing that this time is no different than the past? Can we learn from history?
For the answers, please join me in welcoming our guests this afternoon, Carmen Reinhart and Ken Rogoff.
Thank you for joining us. Carmen is going to go first.
Remarks
CARMEN REINHART: I want to thank the Carnegie Council and Joanne for hosting us, and all of you for coming.
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Financial crises are not random events, say Carmen Reinhart and Kenneth Rogoff. Looking at the the data on boom and bust cycles that have occurred over the past 800 years, a clear pattern emerges. Why can't we learn from history?
Transcript:
Introduction
JOANNE MYERS: Good afternoon. I'm Joanne Myers, Director of Public Affairs Programs. On behalf of the Carnegie Council, I'd like to thank you all for joining us.
Our discussion today is about the economy. We are delighted to have as our speakers two leading economists whose work has been influential in the policy debate concerning the current financial crisis, Carmen Reinhart and Kenneth Rogoff.
They will be talking about their book, This Time Is Different: Eight Centuries of Financial Folly, which, from all accounts, is said to provide the best empirical investigation of the financial crisis to date.
It has been a bad year for the economy. How many times have you heard, "No one was prepared for what has happened," or "It was impossible to see this coming"?
Many economists, especially those caught off-guard, have even claimed that this situation is so unusual that it bears little similarity to anything that has gone before.
Not so, say our speakers. In fact, it is just the opposite. As the ironic title of their book indicates, "This time is different" turns out to be a mantra that Professors Reinhart and Rogoff have discovered to be wrong.
How did they come to this conclusion? In researching their book, our speakers covered 66 countries across five continents, to give us a comprehensive look at the varieties of financial crises. In doing so, they guide us through eight centuries of government defaults, banking panics, and inflationary spikes, from medieval currency debasements to today's subprime catastrophe.
They provocatively argue that financial combustions are universal rites of passage for emerging and established markets. As their statistics show, financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. In their exhaustive research, they examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debt, as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises.
Their data shows that countries do weather their financial storms, but short memories make it all too easy for crises to reoccur, and they will happen again with startling regularity everywhere.
As our guests remind us, we have been here before. If so, we might ask, is it ignorance or maybe arrogance that has prevented us from seeing that this time is no different than the past? Can we learn from history?
For the answers, please join me in welcoming our guests this afternoon, Carmen Reinhart and Ken Rogoff.
Thank you for joining us. Carmen is going to go first.
Remarks
CARMEN REINHART: I want to thank the Carnegie Council and Joanne for hosting us, and all of you for coming.
.
.
.
.
.
.
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