This Time is Different (2009) by Carmen Reinhart and Kenneth Rogoff is a superb compilation of data on financial crises, downturns and sovereign defaults. It is a book that continues the tradition of Kindleberger’s Manias, Panics and Crashes of better describing the history of economic collapses.
The book is not well written and is a labour to read. However, because the material presented is so well done and there is so much of it the book is a huge contribution to economics and public affairs. The book has a plethora of compiled indices, tables and graphs. The authors even compile their own combined index of the various factors that lead to financial problems.
Toward the end of the book the two authors state that better understanding of financial crises and better data collection could help to show when bubbles are forming so that action such as central banks increasing rates could be taken to lessen their effect. The other way to lessen the effect of and reduce crises is for governments to have a real aversion to debt. Given that government debt problems are the norm rather than an aberration government debt should be seen as far more dangerous than it is by many.
The book’s incredibly valuable lesson is that serious downturns are not uncommon events but rather are a consistent part of capitalism. The post WWII period, which still had some crises and defaults, was actually not typical. Politicians and people need to be aware that the good times will end and things will turn South on a regular basis.
The book is well worth reading for anyone with any interest in economics and public affairs. It’s a huge achievement and hopefully more people will read it and become familiar with this incredibly important part of economics.