This Time is Different: Eight Centuries of Financial Folly Review

This Time is Different is probably best described as a quantitative analysis that investigates the history, over the past 800 years, of financial crises that have affected 66 countries, eventually establishing patterns that identify periods of stability and instability in the financial markets. Nevertheless, one thing that is constantly glossed over in This Time is Different is why such periods of stability and instability occur. It’s one thing to recognize that there is a pattern, but statistics need to be appropriately analyzed to explain exactly why markets and economies tumble as they do at certain periods in history.

This Time is Different certainly makes a good case for blaming the governments of the 66 countries included in Rogoff and Reinhart’s analyses. They suggest the various governments’ policies are deliberately shrouded in mystery, actively and knowingly contributing to the financial crises that invariably ensue to the detriment of each country’s populace. This Time is Different certainly makes interesting reading and is certainly an eye-opener when it comes to the repeated mistakes perpetrated throughout the world since around the 13th century.

The authors of This Time is Different express a desire to see governments learn by past mistakes but, from the gist of their evidence it is clear to most readers that these errors of human judgment have been perpetrated over the centuries, with social events subsequently occurring as an indirect result of many of these policies. This continues to be the case and, despite the authors expressing hopes to the contrary, financial policies - both domestic and international - will continue to shape events into the future, with mistakes continuing in much the same ways as they have in the past.

This Time is Different certainly makes illuminating reading and the authors have gone to considerable lengths to present the information in a straightforward and readable manner, illustrated with graphs and charts. Nevertheless, it is debatable whether government policies shape financial events or whether the opposite is true: can financial events result in the development of government policies? One thing that is not in dispute: each is dependent on the outcome of the other and both are closely intertwined, between them resulting in the shape of global history and the story of the world that is yet to come.

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