This chapter explores the various types of crises in the financial system, such as banking crises, currency crashes, government debt crises, and inflation crises. The speaker emphasizes the need to document both sovereign and domestic debt crises, highlighting common characteristics among these crises.
Carmen Reinhart of the University of Maryland talks with EconTalk host Russ Roberts about the ideas in her book This Time is Different: Eight Centuries of Financial Folly (co-authored with Kenneth Rogoff). They discuss the role of capital inflows in financial crises, the challenges of learning the right lessons, and what is generally true about financial crises over time and place. Reinhart applies these observations to the current crisis, discusses the possibility of the U.S. defaulting on its sovereign debt, and discusses the possibility of financial reforms that might make a difference.