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balhau 's review for:
This Time Is Different: Eight Centuries of Financial Folly
by Kenneth S. Rogoff, Carmen M. Reinhart
This is a very interesting book, full of data and respective macro economic interpretation. The last words of the book resume it all
"This time may seem different, but all too often a deeper look shows it is not. Encouragingly, history does point to warning signs that policy makers can look at to assess risk—if only they do not become too drunk with their credit bubble–fueled success and say, as their predecessors have for centuries, “This time is different" "
This piece of work is a detailed analysis on the history of country debts and their respective default.
It analysis, for example, in good detail the nature of public debt, by separating it into external public debt and domestic one and with this in mind and with the help of a bunch of data it draws some interesting conclusions about the nature and consequences of these different kind of debt in the economy and the impact on the respective solvability. The book also help us to have a deeper understanding over the differences between concepts like illiquidity and insolvency and how these play different roles in the evolution of a probable default. In my opinion the biggest point, and well addressed, in this book is the human psychology and how that lead us into the same errors again and again. The time window of analysis is, also a very interesting one, since the evolution of countries economy follows a slower rhythm than human lifetime it follows that society tends to forget about this trivial fact and fall into the sad trap that "this time is different" again and again. I believe that this is a must read, specially nowadays that governments seems to be doing the same old mistakes.
"This time may seem different, but all too often a deeper look shows it is not. Encouragingly, history does point to warning signs that policy makers can look at to assess risk—if only they do not become too drunk with their credit bubble–fueled success and say, as their predecessors have for centuries, “This time is different" "
This piece of work is a detailed analysis on the history of country debts and their respective default.
It analysis, for example, in good detail the nature of public debt, by separating it into external public debt and domestic one and with this in mind and with the help of a bunch of data it draws some interesting conclusions about the nature and consequences of these different kind of debt in the economy and the impact on the respective solvability. The book also help us to have a deeper understanding over the differences between concepts like illiquidity and insolvency and how these play different roles in the evolution of a probable default. In my opinion the biggest point, and well addressed, in this book is the human psychology and how that lead us into the same errors again and again. The time window of analysis is, also a very interesting one, since the evolution of countries economy follows a slower rhythm than human lifetime it follows that society tends to forget about this trivial fact and fall into the sad trap that "this time is different" again and again. I believe that this is a must read, specially nowadays that governments seems to be doing the same old mistakes.