Carmen M. Reinhart (née Castellanos, born October 7, 1955) is the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School. She has been the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School since 2012.[2]. The first historical study is detailed in the book, This Time Is Different, by Carmen Reinhart and Kenneth Rogoff, who’ve extensively researched the impact of high debt on inflation and gross domestic product (GDP). [18], In 2013, Reinhart and Rogoff were in the spotlight after researchers discovered that their 2010 paper "Growth in a Time of Debt" in The American Economic Review Papers and Proceedings had methodological and computational errors. Again, we’re going to see huge forces pulling apart the euro zone. ... which her husband… And let’s remember, their population dynamic is completely changing. We’re talking about economies shrinking by 25% to 30%. But at the end of this, I think we’re going to have experienced an extremely negative productivity shock with deglobalization. The world will follow a path similar to the 2008 global financial crisis, only worse, Reinhart and her husband, Vincent Reinhart, the chief economist at Standish Mellon Asset Management, write in the forthcoming issue of Foreign Affairs magazine. It’s going to be enormously costly. She is … The World Trade Organization tells you trade can decline anywhere between 13% and 32%. I go back to my Wizard of Oz analogy. To figure out what might be next, Bloomberg Markets spoke to Reinhart, a former deputy director at the IMF who’s now a professor at the Harvard Kennedy School, and Rogoff, a former IMF chief economist who’s now a professor at Harvard. But I’m saying that then your settling point is going to be lower than 6%. In terms of growth and productivity, they will be lasting negative shocks, and demand may come back. KR: We argued at the time that the right recipe was to involve writedowns of the southern European debts. So we wanted to be close to family. The policy response is also different. What this does mean is that the market is really counting on a lot of rescues. And yet a little more than a decade later, we’re experiencing what appears to be a one-of-a-kind crisis. [1] In the 1990s, she held several positions in the International Monetary Fund. In 2008 it was the rich countries and not the emerging markets. [1] After Reinhart passed her field examinations, she was hired as an economist by Bear Stearns and rose to the investment bank's chief economist three years later. China needs to be on board with debt relief. They [the emerging markets] had a “good” crisis in 2008, but they’re not going to this time, regardless of how the virus hits them. She and her husband … We’re going to see a lot of risk aversion. The Covid-19 pandemic has catapulted the world into its deepest recession since the Great Depression, provoking an unprecedented fiscal and monetary response. Lastly I think we’re not in a position to use deeply negative interest rates because the preparation hasn’t been done. The market is banking on this V-shaped recovery. The Journal of Economic Perspectives 30.1 (January 2016): 3-27. Previously, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics. Many … So I think initially that the PBOC [People’s Bank of China] has been somewhat constrained initially in doing their usual big credit stimulus by uncertainty over their inflation. Carmen Reinhart, together with her fellow economics professor Kenneth Rogoff, wrote the highly acclaimed…This Time Is Different: Eight Centuries of Financial Folly. James L. Rowe Jr. profiles Carmen M. Reinhart, who focuses on facts and history Had Miami Dade College offered a concentration in fashion design, Carmen Reinhart might never have become an economist. KR: It’s fiscal policy that they’re doing in this emergency situation. So central banks all over the world are using the fiscal side of their balance sheet. So the abruptness and the widespread shutdowns we had not seen before. And I think that’s very wrong. But there’s a big-picture question about their huge centralization, which is clearly an advantage in dealing with the national crisis but maybe doesn’t provide the flexibility over the long term to get the dynamism that at least you’ve got in the U.S. economy. The authors, husband and wife economists Vincent and Carmen Reinhart, take a close, quantitative look at the 21-year period surrounding financial … Think about China. Obviously, this has been done to differing degrees of effectiveness in different countries, with Asia reacting much quicker and with much better near-term outcomes than Europe and the U.S. BM: How do you regard the economic policy response? When this crisis began to morph from a medical problem into a financial crisis, then it was clear we were going to have more hysteresis, longer-lived effects. Do we see that blurring of lines with fiscal policy? BM: What about China, which also has leverage challenges? Our son lives in this area. [3] and Professor of Economics and Director of the Center for International Economics at the University of Maryland. This Time Is Different: Eight Centuries of Financial Folly reminded readers that the catastrophic 2008-09 credit crisis was far from unique. [22][23][24], Reinhart met her husband, Vincent Reinhart, when they were classmates at Columbia University in the late 1970s. Carmen Reinhart, Wikipedia ... Romer's later work, with her husband David Romer, has concentrated on the effect of tax changes on the US economy. If the euro zone doesn’t find a way to deal with this, maybe eurobonds might be in the picture to try to indirectly provide support. An earlier version of this story gave an incorrect year in the fourth answer from Kenneth Rogoff. Is this time different? Graciela L. Kaminsky and Carmen Reinhart. Our son lives in this area. It’s probably going to be, at best, a U-shaped recovery. [2] Previously, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics. Reinhart on This Time Is Different. But what lies at the other end? But a couple of years later, the focus had moved from the banking problem to the debt problem. Vincent’s brother lives in this area. “I don’t know how long it’s going to take us to get back to the 2019 per capita GDP. A separate and previous criticism is that the negative correlation between debt and growth need not be causal. The monetary response has been done hand in hand with the Treasury. And I think if you take away the globalization, you probably take away some of the technology. Patrick R. Sullivan 14. You really can’t use that experience as any template for this. CR: How much of the resilience, if not ebullience, in the market is policy driven? It’s obviously a surreal experience overall. So we wanted to be close to family. They’re actually not that different. And those [declines] are just staggering compared to the debt burden costs, whatever they are. ", "Rogoff and Reinhart defend their numbers", "Does High Public Debt Consistently Stifle Economic Growth? Reinhart, Carmen, and Vincent Reinhart. Her work is featured in the financial press, including The Economist,[12] Newsweek,[13] The Washington Post,[14] and The Wall Street Journal. KR: Certainly the global nature of it is different and this highlights the speed. (2010) "Growth in a Time of Debt." Instead it has hired Carmen Reinhart of Harvard University, one of the most widely cited economists in the world (and the most cited female economist). She received her Ph.D. from Columbia University. Among economists, they are heavy hitters. China came into this with inflation running over 5% because of the huge spike in pork prices. It’s very possible that the path was toward rising interest rates. Initially, she said, her middle-class family had felt no immediate threat from the 1959 revolution led by There are a lot of geographic changes that are being necessitated because, if the economic downturn has been synchronous, the disease itself hasn’t been synchronous. We came to Florida, where we’ve had a house for a decade. Reinhart met her husband, Vincent Reinhart, when they were classmates at Columbia University in the late 1970s. 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