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The Crisis Next Time

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The Crisis Next Time

What We Should Have Learned From 2008

Foreign Affairs,

5 min read
5 take-aways
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What's inside?

Lurking beneath shiny economic reports are deep problems that could threaten global stability.

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In 2008, a financial crisis that few had anticipated dealt a knockout punch to countries around the world. In 2018, many economies have regained much of their lost ground. But persistent problems remain, according to noted economists Carmen Reinhart and Vincent Reinhart in this insightful synthesis of the lessons learned. While no one knows when another calamity will hit, the classic human flaws of greed and complacency continue to make other such events likely. Analysts and students of economic history will find this a useful overview. 


In the early 2000s, many policy makers believed that, except within emerging markets, financial crises were unlikely. After all, the years between 1990 and 2007 in the United States, dubbed the Great Moderation, saw tame inflation and an economic growth pattern that was much less volatile than that of the previous three decades. Officials in the advanced countries believed that their economies had achieved a state of self-regulation and that their policies had conquered the business cycle. They were “complacent about the risk of financial disaster.” Then the...

About the Authors

Carmen Reinhart is a professor at Harvard Kennedy School. Vincent Reinhart is the chief economist at Standish Mellon Asset Management.

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