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The antecedents and aftermath of financial crises as told by Carlos F. Díaz-Alejandro

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  • Reinhart, Carmen M.

Abstract

Some of the best-known papers of Carlos F. Díaz-Alejandro were about Latin America’s crises in the 1980s and 1930s. I show data, figures, and evidence about the crises in the advanced economies thirty years later that fit the same narrative. His unadulterated words aptly describe modern problems across geographical borders and, in this case, income levels. This attests to his timeless insight and understanding. Because some of the observations he made have general applicability to the study of recurring patterns across crises, I have taken the liberty to label these lessons. These are primarily lessons about what to avoid.

Suggested Citation

  • Reinhart, Carmen M., 2015. "The antecedents and aftermath of financial crises as told by Carlos F. Díaz-Alejandro," LSE Research Online Documents on Economics 123289, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123289
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Carlos Diaz Alejandro & G. Helleiner, 1982. "Handmaiden in distress: world trade in the 1980's," Textos para discussão 35, Department of Economics PUC-Rio (Brazil).
    4. Enrique G. Mendoza & Marco E. Terrones, 2014. "An Anatomy of Credit Booms and their Demise," Central Banking, Analysis, and Economic Policies Book Series, in: Miguel Fuentes D. & Claudio E. Raddatz & Carmen M. Reinhart (ed.),Capital Mobility and Monetary Policy, edition 1, volume 18, chapter 6, pages 165-204, Central Bank of Chile.
    5. Guillermo A. Calvo & Alejandro Izquierdo & Luis-Fernando Mejía, 2008. "Systemic Sudden Stops: The Relevance Of Balance-Sheet Effects And Financial Integration," NBER Working Papers 14026, National Bureau of Economic Research, Inc.
    6. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    7. 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.
    8. Guillermo A. Calvo & Alejandro Izquierdo & Luis-Fernando Mejía, 2008. "Systemic Sudden Stops: The Relevance Of Balance-Sheet Effects And Financial Integration," NBER Working Papers 14026, National Bureau of Economic Research, Inc.
    9. Gerardo della Paolera & Alan M. Taylor, 2001. "Introduction to "Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880-1935"," NBER Chapters, in: Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880-1935, pages 3-36, National Bureau of Economic Research, Inc.
    10. Gerardo della Paolera & Alan M. Taylor, 2001. "Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880-1935," NBER Books, National Bureau of Economic Research, Inc, number paol01-1.
    11. 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.
    12. Calvo, Guillermo A, 1986. "Temporary Stabilization: Predetermined Exchange Rates," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1319-1329, December.
    13. Velasco, Andres, 1987. "Financial crises and balance of payments crises : A simple model of the southern cone experience," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 263-283, October.
    14. Kaminsky, Graciela L. & Pereira, Alfredo, 1996. "The debt crisis: lessons of the 1980s for the 1990s," Journal of Development Economics, Elsevier, vol. 50(1), pages 1-24, June.
    15. Maurice Obstfeld, 2014. "Never Say Never: Commentary on a Policymaker’s Reflections," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(4), pages 656-693, November.
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    More about this item

    Keywords

    financial crisis; debt; commodity prices; overvaluation; capital flows;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G00 - Financial Economics - - General - - - General
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General

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