Carmen Reinhart and Kenneth Rogoff know financial crises. In the preamble to their book, recommended by FP Big Thinkers Willem Buiter and Mohamed El-Erian, the two trace back the history of how, with each shock and economic trouble, the world believes that this time is different. It’s not.
BY CARMEN M. REINHART, KENNETH ROGOFF | DECEMBER 3, 2009
Financial crises are nothing new. They have been around since the development of money and financial markets. Many of the earliest crises were driven by currency debasements that occurred when the monarch of a country reduced the gold or silver content of the coin of the realm to finance budget shortfalls often prompted by wars. Technological advances have long since eliminated a government’s need to clip coins to fill a budget deficit. But financial crises have continued to thrive through the ages, and they plague countries to this day.
Filed under: Finanzas Internacionales (JP), Macro 2 | Tagged: crisis financiera 2009, reinhart, restricciones presupuestales blandas, rogoff, soft budget constraints | Leave a comment »
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