- 1. THIS TIME IS DIFFERENT Copyrighted maerlal
- 2. Copyrighted malElrlal
- 3. THIS TIME IS DIFFERENT Eight CentuTies of Financial Folly
CARMEN M. REINHART KENNETH S. ROGOFF PtlnUIoR alld Orford
Copyrighted malElrlal
- 4. e-.....c:> JOO9", fri>:
- 8. M,'""",no t"l""",oilitr H Clt,b..,nd R,'dnn. J1 , A Globl
P'iWho."'OD Fjn.ne'"l Crj~~ lith 0 1~",~-T"Tm Vipw J4 ITh:t'~
Ewh"nb~' R;,,,. 49 , A Di.,."",.;,,,, on tl", Th,-~'rct [,,31
Unlkrrinllinb" ,,( D"ht Cd"" SI ""~""'S" Lo,,,I'ng 54 1IIIif'od,,,'
",,...,_ j "'oko""" 59 rom,,1 Def,,,;,,nd R,,,,"'-.J!lliog 6[
01"",0.+, 6J D"mclt,.. l'!d,]i< Deb! M c,,,,rlWK1D' 67
R""ll'Tin.I''''''ffi' M 0...f,,,1< >n.! Il,,,kio~ en"" 13
IM'mlt Jo'llntl"'j"" i5 Gk>bal roc",,, emJ C,cI." of(,101-,1
E.,rom,1 !A'f'ul, 7J The [':>urAl"'" dl),'f."h Er'snd"" $1 vIii
Copyrighled maerial
9. CO>lnNT. 5 hlc'm.l [).,f"uh th"",gh HhlO'y 86
Tl>< E"I)' H,,,,,,,,ofSI' l).,m,,,,,, [).,f,"h 110 '>ome
0.",,,,, R08.,d'''~ 1),"'l " Copyrighted maerial 10. e=l'I
&.nki"ll Cri>e>, I"fl.,!.)", and Currenq Cn'sht... 139
ill R:mki e,i,,,, 141 A P"" ..H,. "n ,I., Thn'mg C,,~,.: An
F....,,"I()l'f'(,mJn;ty Mon",. 147 FIon;,"~ en,. C"!'i,,1
1.1...0,1",-, ,,,,I F'n,n.1 L,halI"'T;IOn. 182 Gm,,"q era,h", 189
Th. AI'omuth 0( Hil.i> InIL"",." >tid Cut1 1928--1933 "53
Ex"",,,,l dcl'ault prn.lb.', 1811_1815 "1.' Foreign
currency--linkc-d oom..t;c deh" Thai I 24. Copyrighted malElrlal
25. PREFACE Th;; 1xxJ; prO"Ld", qu.n,i,.,i", h;;t.y rema,kobl"
.in,it.,ili", ",'i,h I"''' expcorkn and p",,.edenlO ;" all
e''''nti.l Sl~'P to...~rd impro"in~ oor ~lohallin"nciaj
''S1ph.......h..-11 rh~" h.ppt.'1l. If rh~.,.., ;; 0'"'" cOmm(lr'l
,hem" ro the ,...t rnn~ "fcn"-,,, "'" ks Ihan ir """'" Ju'in{:
boom. Jnfu.o.;.rul of cay, Oan ",ake "l:O"l'rtHn""llook lik it;;
pll"iding ,,,,,Ol'" wowlh 10 its cor;ooorny than i' ....-ally i,.
Prin,e 1IO:C1Or berra",'ing bin",..", can iniIal~~>d badl}'_Of,
.ndent .nd moo,.,.", bel, bolaneiIlj; th" ,i.k and 0pl'0rtuni'i''S
ofddt. i. alway, 3oh"lI """"rately. BUI crise. fu,h have
hiot....ieo tha, :.ran ,,,roriend eut ac'UI' '.11Ion. Suul, dfa""
condu.iorur basedon d:Jra coll,'(;[eU are ~rcatly limited in
....."'.,1 Olh..'T importa", re"J'CCl>. c;p"dally in regaN '0
thei' cO,....."'l,' of ""viii Copyrighted malElrlal 29. ,he laIC
2txXls ,ha' orij:inou"d in ,hc' Unil~.,j St.tc'S and ,pread
3C1'OS> ,ru, ~lobt-----which w~ ".(c.,. to th~ Seco"d G",.,
Con".ch,m-I.'l only lhe 1""'1 m."if"'I'lkm ofth" p'UCtn, We lokc up
th~ I.tcst e,i,;' ill the ~ll.l fout ch"ptc"'" blly
k",.[.currt.oney) debt i' One "f ,h~ ,no", "",..,1 fealUre, 1M'
round, 001 oor.rudy of nn"llC;,.1 cri...... Tbe I'"I'tJff l ,his
sclUtilly coITIc$ In lh: 1'"'" of ,he booI:, whieh arrll' me..,
cone"!,,, 10 ou, cxp.mled global da,. "'I. Part ilIUm' OUr
'llcn,ion to gOvcnmen, debt, ~hro"icli"ghun_ d-d.
of~"'Piscde>ofrl,k OCCOJ'. i, app"".. 10 occur In ,i'U3tions of
~rc3tC1"durcso rhan those ,ha, k.J 10 f'Urc "". t"m.1 Jcf.,ult-;n
'."",ofbuth on implooion ofOUlpU' OfIlIa marko..,j """,l.tion of
infl>lion. Pan IV l:-rooJem our dtscu"ion to in in ,merging
ma,k...... This dichotomy ha. pcrhap> bed to """'I'" bout> of
high infl"l~m, Ind,,'.,J Ih,-"", i. a '-ery ..",ng parnlld
brt"""'"" "ur prOf 33. a eh.."h""") hiswry, induJinj: in 1779,
wh..'fI the infl,tim rale "P- proachrtl 200 percent. Early on
aeros, lhe world, "' "lreooy nOlrtl, tN, m.in df,"",e for
Jefaultlnjl on !K''''rt",,,,nt obligmiQn. ",d. ,hm of deoo,i"ll me
eomem of the coinage. Modem currency I"""""" arc jW>t a t
absolutely e,itkal to oor story_ R~" .,,"',..,] th.. these are
only"",," del"""" and ,Iost, un_ cnc at onee-----say. because of
panic base'-troubleen..,.,.. AI>- """ a way to ....11 I"
i11iquitll(>,1tl portfol.." th... bank ml~h, simply ""t be abl"
to p.y off it> paoick,il d'1'O'itOfS. Such "'''' the fa,e of rhe
bnko in the cla"ic movie. ft, a W~l Lif,> and Mary ('p' pins.
Those mov"", were toowd in ",""Iity: maoy bank,ho,.." sh.,,-il
thl< f.te. poTtieully ",'hen the glwcrnm,""t h.. T'' fully
1lI,arnnt",-il bonk d.,posiU. The m""t famous l! banh, Clln suffur
from" crnb of eon~dern:e. During ,he fimmdal cri' crises >
nci,lK'f ft.-a.ible no, """iroble. (Exactly ,hi> oonundn'm will
f."" ,he ~Ioho1fin.ndal community in ,he "'ake of the I.,cst
financi.1 eri,"" with the IMF. k-ndi~ """""'"'' ha"illl: bee"
increa.ro fourfold in ""I"'''''' to lhe erisi, while", book.
Economic not terribly ....In''rable to cr;"" "fconlidmce. A
~'-etn"",nt 1"" "",,,--. wllich II., >ple"J to ll..,..rlv
C"cry ~iOll-,,"il h.,c a p1lfoond dr,'CI on c'Cooomic.,
r.rticul'U"ly Ir.: .tudy of Iin~"l:e> Ix'f"""n linanc;,,1
markcr. "lid tn.. ,,-"al ,'COlIOtlly.' w~ hoI''' SOt71t' of ,h~
fan' lak! 00' illlhli book will be helpful in fr.min~ thc pmblem'
th.. the ,,",w thooric' ",'Cd to ~.plain, not juc> that ha,'c
oceurr,.J in ,hc past. nO! to m""liollth~ mallY 46. Copyrighted
malElrlal 47. THIS TIME IS DIFFERENT Copyrighted malElrlal 48.
Copyrighted malElrlal 49. - PART I - FINANCIAL CRISES: AN
OPERATIONAL PRIMER T""= of ,he ,hl,,!mcjs.diffpk",-"""ly lCmi!i'c
10,m.1I ehanges in ou,~u,off("Oina or "ftc...., "'"a..,
p.nkularlyconc:em.-d .bou,ok.'ll' in.Jequoe;"" in the dJ[>l.
This J,eiinl'lon ehap,e,.bo ~,.." u' a con"~ni"", ''l'P-'""'uni'y
to expar.d bit m",... on ,...... v:lTie!y ofcrises ,," take up in
this book. The n:a Ji",u,scJ in ,h;,~h:lptcor ",f... lL ,hc
m"""",".",""t of~fj"" wi,hin individlJOl coo.n- "iclon.
oulmitl.lling in OUT ',,"'hnition of , ~lob.tl e,i,i, in ehaple,
16. In addi lion to fI.'f'O"ing on one rourmy "' time. Wt roo!
=."'"..ofcrisi< Copyrighted malElrlal 52. 1. "~ANsse'S
'''''''''!,. Th~ m,in 'CUDn '''' u""' Ihis ;q>ptic bank, do not
h.we p"blidj" lrad.,,,,,1 .1;""",. "",,.Jb '" ,I,.. "",,,,,,,,I..,.
ofthO"",....J in to< l!nl.~ '01 H=.kJ on "'fbt .1
