Carmen Reinhart Photo

Carmen Reinhart

Appointment
Minos A. Zombanakis Professor of the International Financial System
Office Address
79 John F. Kennedy St. Littauer Bldg 313
617-496-8643
Reinhart, Carmen, and Vincent Reinhart. "The Crisis Next Time: What We Should Have Learned from 2008." Foreign Affairs 97.6 (November/December 2018): 84-97.

Abstract

At the turn of this century, most economists in the developed world believed that major economic disasters were a thing of the past, or at least relegated to volatile emerging markets. Financial systems in rich countries, the thinking went, were too sophisticated to simply collapse. Markets were capable of regulating themselves. Policymakers had tamed the business cycle. Recessions would remain short, shallow, and rare. Seven years later, house prices across the United States fell sharply, undercutting the value of complicated financial instruments that used real estate as collateral—and setting off a chain of consequences that brought on the most catastrophic global economic collapse since the Great Depression.