At this AEI event, Carmen M. Reinhart and Kenneth Rogoff discuss their new book, which probes an array of crises to show why the four most dangerous words in finance are "this time is different."

History shows us that sovereign governments often default on their loans, particularly in times of war or economic upheaval. Europe finds itself in this situation now and would do well to examine past sovereign debt crises—particularly, the European sovereign debt crisis of the 1920s—for lessons.

Voters seem to be rejecting the Obama Democrats' vast expansion of government, saying to leave the private sector alone so it can recover from the financial crisis recession and once again create bounteous and unscripted growth.

When markets are irrational, it's impossible to say what might set them off, and fear of disaster becomes a powerful excuse for policy makers to do whatever they choose.

Reinhart and Reinhart find that economic growth is slower in the decade following a macroeconomic disruption, and extend their results to show that a faltering of economic recovery is not uncommon after a severe financial shock-although this can often be ascribed to exogenous events.

Sudden stops and reversals in capital flows are the stuff of policymakers’ nightmares. The last 20 years of research shows that the capital-inflow dilemma is not an external problem–it is an eternal one.

The United States may not have laid the foundation for sustained expansion, with real per-capita output still 2.2 percent below its 2006 level. The chance that the economy slips into another recession within a year is about four in ten.