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Financial Crises: Past and Future

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  • Reinhart, Carmen

    (Harvard Kennedy School)

Abstract

This article, based on my Adam Smith Lecture at the 60th NABE Annual Meeting on September 2018, takes a selective global tour of some of the prominent economic and financial risks in advanced, emerging, and low-income developing economies. The primary emphasis is on near-term risks. The discussion covers areas where vulnerabilities have either already become manifest, or those where risks are mounting but have not yet sounded a glaring alarm. For the advanced economies, the topics cover aspects of the recent surge in collateralized lending obligations (CLOs) in the United States and Europe that are reminiscent of the pre-crisis boom in mortgage-backed securities as well as Italy's unresolved debt overhang. On emerging markets (EMs) and developing economies, the themes cover: the curious case of the missing defaults (2011-2018); global factors and EM turbulence; and China's international lending to low-income countries and its consequences. A brief discussion of some persistent medium-to-long-term concerns about the rising levels of US public debt and the tensions that arise from internal economic objectives and the external pressures associated with the US dollar's role as the world's principal reserve currency completes the discussion. The tour starts with an assessment of the 2008-2009 global financial crisis' recovery experience.

Suggested Citation

  • Reinhart, Carmen, 2019. "Financial Crises: Past and Future," Working Paper Series rwp19-005, Harvard University, John F. Kennedy School of Government.
    • Handle: RePEc:ecl:harjfk:rwp19-005
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Vincent Reinhart & Christoph Trebesch, 2016. "Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015," American Economic Review, American Economic Association, vol. 106(5), pages 574-580, May.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    3. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor will Hold?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 599-646.
    4. Carmen M. Reinhart & Christoph Trebesch, 2016. "The International Monetary Fund: 70 Years of Reinvention," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 3-28, Winter.
    5. Rey, Hélène, 2015. "Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence," CEPR Discussion Papers 10591, C.E.P.R. Discussion Papers.
    6. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    7. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1993. "Capital Inflows and Real Exchange Rate Appreciation in Latin America: The Role of External Factors," IMF Staff Papers, Palgrave Macmillan, vol. 40(1), pages 108-151, March.
    8. Fratzscher, Marcel, 2012. "Capital flows, push versus pull factors and the global financial crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 341-356.
    9. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    10. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "Recovery from Financial Crises: Evidence from 100 Episodes," American Economic Review, American Economic Association, vol. 104(5), pages 50-55, May.
    11. Òscar Jordà & Moritz Schularick & Alan M Taylor, 2011. "Financial Crises, Credit Booms, and External Imbalances: 140 Years of Lessons," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(2), pages 340-378, June.
    12. Maurice Obstfeld, 2013. "The International Monetary System: Living with Asymmetry," NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 301-336, National Bureau of Economic Research, Inc.
    13. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor will Hold?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 599-646.
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    Cited by:

    1. Umberto Collodel, 2021. "Finding a needle in a haystack: Do Early Warning Systems for Sudden Stops work?," Working Papers halshs-03185520, HAL.
    2. Umberto Collodel, 2021. "Finding a needle in a haystack: Do Early Warning Systems for Sudden Stops work?," PSE Working Papers halshs-03185520, HAL.
    3. Eisenschmidt, Jens & Kedan, Danielle & Schmitz, Martin, 2024. "Euro area monetary policy and TARGET balances: A trilogy," Journal of International Money and Finance, Elsevier, vol. 141(C).
    4. repec:fip:a00001:94154 is not listed on IDEAS
    5. Larry D. Wall, 2021. "So Far, So Good: Government Insurance of Financial Sector Tail Risk," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2021(13), November.
    6. repec:rbz:oboens:11020 is not listed on IDEAS

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    More about this item

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F00 - International Economics - - General - - - General
    • G00 - Financial Economics - - General - - - General

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