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Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  “This Time it is Different” Date:  10/4/2012  12:03 PM
Author:  rclosch Number:  405287 of 503018

This excellent book written by two professors from Harvard Carmen M. Reinhart and Kenneth S. Rogoff while not exactly a beach read is an important book for anyone that seeks an understanding of economic history. The title of the book is based the fact that investors, businessmen and bankers in the midst of an economic expansion assume that the expansion will continue indefinitely. But in the real world, as economist Hyman Minsky pointed out “stability is unstable”. Long periods of prosperity feed hubris and greed, and encourage excessive risk taking. In a free market environment each period of economic expansion carries with it the seeds of its own destruction.

The “This Time it is Different” published 2009 contains a huge database of 800 years of country defaults, banking crisis, and currency debasements. Much of material is new, having been complied and consolidated by the authors from statistics collected al