They Did Their Homework (800 Years of It)

Unfortunately the authors dont give a prescription. Given that this one was fueled by hubris and institutional corruption with no political will to fix it, we are due for more in the future.

--It's really more of a statistical assay than it is a history book. There are several parts where they actually take a look at the history of the various defaults like a historian would and in my opinion these are the most valuable parts. By understanding the players and their motivations at a given point and time, you can apply the past to current events and somehow get a weighting of various probably outcomes for the current crisis. Instead, the book seems to focus on table after table and some of the data by its nature is going to be incomplete or incongruent.

--Just to add on to the point above-- while the genesis of every economic crisis is often novel, they usually end with the same kind of behaviors of fear and hording. Understanding how that unfolds in each crisis and how policy makers might prevent that behavior would be valuable to study. The most important parts of economics is "behavioral " economics. Understanding the wild spirits is half the battle.

---There is a lot of noise around these days about economists trying to be physicists with large econometric models trying to predict exactly what the economy is going to do. I remember my first stint as a government trade economist as we tried to use very complex models from the University of Maryland to predict the impact of trade agreements. I always thought this was all nonsense as human behavior is the ultimate driver and it's more akin to modeling the weather than how fast a bullet is going.

--While I love tables too, there were not a lot of good conclusions from the data. I wanted more hard and fast rules about when a crisis reaches a tipping point. In the end, despite mountains of data I don't feel like I was materially better armed to understand how a crisis will unfold after reading the book.

Their handiwork is contained in their recent best seller, “This Time Is Different,” a quantitative reconstruction of hundreds of historical episodes in which perfectly smart people made perfectly disastrous decisions. </snip>

http://www.economics.harvard.edu/faculty/rogoff/Recent_Paper...

If Ken Rogoff knew the economy was in trouble, he did a good job of hiding that this 2007 interview: http://www.onpointradio.org/2007/11/wheres-the-economy-heade... (!!)

I don't know where the 2003 starting date came from. Perhaps they started a different book then and re-purposed it for the present events. Or perhaps he was hiding stuff in the 2007 interview (though I'd doubt it).

Anybody has pointers to where this data comes from? What about other professions?