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A critical note on "This time is different"

Author

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  • Antoine Parent

    () (Université Nancy 2 et BETA CNRS UMR 7522, Nancy, France)

Abstract

This article is structured as follows: the first section is based on Reinhart and Rogoff’s seminal papers (Am Econ Rev 98(2):339–344, 2008a, b, Am Econ Rev 99(2):466–472, 2009a, This time is different: eight centuries of financial folly, Princeton University Press, Princeton, 2009b, Am Econ Rev 100(2):573–578, 2010) and text book (2009), which today constitute the new cornerstones of conventional wisdom on the recurrence of financial crises throughout History, their development and aftermath. We deliver a critical view of this attempt to infer some systematic empirical relationship between debt, growth and inflation and underline the absence of core variables in this historical analysis. In Sect. 3, we go back 10 years to illustrate that conventional wisdom was much different at that time, emphasizing the peculiarity of each episode of the financial crises. This raises the issue of the relevancy of the cliometric approach to identify regularities down through History: so, should we trust cliometricians?

Suggested Citation

  • Antoine Parent, 2012. "A critical note on "This time is different"," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(2), pages 211-219, May.
  • Handle: RePEc:afc:cliome:v:6:y:2012:i:2:p:211-219
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    File URL: http://dx.doi.org/10.1007/s11698-011-0066-3
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    References listed on IDEAS

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    1. Thomas Piketty & Emmanuel Saez, 2007. "How Progressive is the U.S. Federal Tax System? A Historical and International Perspective," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 3-24, Winter.
    2. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    4. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    5. Michael D. Bordo & Barry Eichengreen & Jongwoo Kim, 1998. "Was There Really an Earlier Period of International Financial Integration Comparable to Today?," NBER Working Papers 6738, National Bureau of Economic Research, Inc.
    6. Jean-Luc Demeulemeester & Claude Diebolt, 2007. "How much could economics gain from history: the contribution of cliometrics," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 1(1), pages 7-17, April.
    7. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," American Economic Review, American Economic Association, vol. 96(2), pages 200-205, May.
    8. Dora Costa & Jean-Luc Demeulemeester & Claude Diebolt, 2007. "What is ‘Cliometrica’?," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 1(1), pages 1-6, April.
    9. Ann M. Carlos, 2010. "Reflection on reflections: review essay on reflections on the cliometric revolution: conversations with economic historians," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 4(1), pages 97-111, January.
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    Cited by:

    1. Moen, Jon R. & Tallman, Ellis W., 2000. "Clearinghouse Membership and Deposit Contraction during the Panic of 1907," The Journal of Economic History, Cambridge University Press, vol. 60(01), pages 145-163, March.
    2. Nason, James M. & Tallman, Ellis W., 2015. "Business Cycles And Financial Crises: The Roles Of Credit Supply And Demand Shocks," Macroeconomic Dynamics, Cambridge University Press, vol. 19(04), pages 836-882, June.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
    4. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International Historical Comparison," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(3), pages 291-299, September.
    5. Alexandru Minea & Antoine Parent, 2012. "Is High Public Debt Always Harmful to Economic Growth? Reinhart and Rogoff and some complex nonlinearities," Working Papers 12-08, Association Française de Cliométrie (AFC).

    More about this item

    Keywords

    Financial and banking crises; Public debt; International financial markets; Regulation;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • G01 - Financial Economics - - General - - - Financial Crises
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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