Carmen Reinhart

Carmen M. Reinhart
Born	Carmen M. Castellanos (1955-10-07) October 7, 1955 Havana, Cuba
Occupation(s)	Economist, professor
Years active	1980s–present
Known for	Research on financial crises, co-author of This Time is Different: Eight Centuries of Financial Folly
Notable work	This Time is Different: Eight Centuries of Financial Folly

Carmen M. Reinhart (born Castellanos on October 7, 1955) is a Cuban-American economist currently holding the Minos A. Zombanakis Professorship in the International Financial System at Harvard Kennedy School. Prior to this position, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics and served as Professor of Economics as well as Director of the Center for International Economics at the University of Maryland. Reinhart is affiliated as a research associate with the National Bureau of Economic Research, a Research Fellow at the Centre for Economic Policy Research, a founding contributor to VoxEU, and a member of the Council on Foreign Relations. Additionally, she participates in professional organizations including the American Economic Association, the Latin American and Caribbean Economic Association, and the Association for the Study of the Cuban Economy.

Her work attracted significant notice following the discovery of computational mistakes in a co-authored research publication.

On May 20, 2020, Reinhart was named World Bank Chief Economist, with her appointment commencing on June 15, 2020.

Based on data from Research Papers in Economics (RePec), Reinhart ranks among the world’s leading economists by both volume of publications and citation impact. She has provided testimony before the United States Congress and has been honored by recognitions such as Foreign Policy's Top 100 Global Thinkers, Thomson Reuters' The World's Most Influential Scientific Minds, and Bloomberg Markets Most Influential 50 in Finance. In December 2018, she received prestigious accolades including the King Juan Carlos Prize in Economics and Nabe's Adam Smith Award.

Early life

Reinhart was born in Havana, Cuba, and emigrated to the United States with her family on January 6, 1966, at age ten, carrying only three suitcases. The family initially lived in Pasadena, California before relocating to South Florida, where she spent her formative years. She started her higher education at two-year Miami Dade College before transferring to Florida International University, where she graduated summa cum laude with a Bachelor of Arts in Economics in 1975. She then earned a master’s degree in philosophy from Columbia University in 1981 and completed her Ph.D. at Columbia in 1988.

Career

Encouraged by Peter Montiel, an MIT alumnus teaching at FIU, Reinhart enrolled at Columbia University graduate school in 1978. After successfully passing her field examinations, she joined Bear Stearns as an economist and advanced to become the investment bank’s chief economist within three years. In 1988, she returned to Columbia to pursue her doctorate under the guidance of Robert Mundell. Throughout the 1990s, Reinhart held multiple positions at the International Monetary Fund (IMF), including serving as deputy director of its Research Department from 2001 to 2003. Since 2012, she has held the Minos A. Zombanakis Professorship in International Financial Systems at Harvard Kennedy School.

Reinhart has contributed to editorial boards for leading publications such as The American Economic Review, Journal of International Economics, and International Journal of Central Banking. She was recognized among Bloomberg Markets 50 Most Influential individuals in both 2011 and 2012.

Outside academia, Reinhart has generated income through speaking engagements at conferences, advisory consulting, authorship, and royalties.

Awards and Honours

In June 2023, Reinhart was awarded a Doctor of Laws (LLD) degree by the University of St Andrews in recognition of her outstanding achievements in the field of economics.

Research and publication

Reinhart has an extensive publication record covering macroeconomic and international finance issues, including topics such as international capital movements, capital controls, inflation dynamics, commodity price fluctuations, banking crises, sovereign debt defaults, currency collapses, and financial contagion. Her work is published in prestigious journals like The American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics, and the Journal of Economic Perspectives. Additionally, her analyses have been featured in prominent financial news outlets such as The Economist, Newsweek, The Washington Post, and The Wall Street Journal.

Together with Kenneth Rogoff, she co-authored the book This Time is Different: Eight Centuries of Financial Folly, which explores recurring themes in financial booms and busts throughout history. This influential work has shaped perspectives on financial crises across both advanced and developing economies, has been translated into more than 20 languages, and earned accolades including the Paul A. Samuelson Award.

Since 2014, Reinhart has regularly contributed monthly columns to Project Syndicate, offering insights on worldwide economic trends.

Work on the 2008 near-meltdown and the Great Recession of 2008 & 2009

Economist Alan Blinder acknowledges that Reinhart and Kenneth Rogoff played a crucial role in identifying fundamental elements of the 2008 financial crisis and the subsequent Great Recession.

Conventional recessions—such as those experienced in 1991 or 2000—typically respond well to Keynesian fiscal measures like tax reductions and infrastructure investments, alongside monetary easing through interest rate cuts, resulting in recoveries within a few months. Even the severe downturn during the 1982 adhered to this pattern.

However, the 2008 crisis inflicted profound damage on financial institutions while generating substantial debt burdens across governments, households, corporations, and banks. These conditions limited the effectiveness of traditional fiscal interventions due to political constraints and financial fragility. Economist Paul Krugman contended that although stimulus packages such as the October 2008 bailout and the February 2009 bailout were implemented, their scale was insufficient; nevertheless, Blinder points out these interventions were comparatively large relative to previous bailouts. With interest rates approaching zero, monetary policy had minimal impact.

Blinder credits Reinhart and Rogoff for emphasizing that recovery from what he terms a “Reinhart-Rogoff recession” might necessitate debt restructuring or indirectly achieving higher inflation to alleviate debt pressures.

Criticism and controversy

In 2013, Reinhart and Rogoff's prominent 2010 study, Growth in a Time of Debt, published in The American Economic Review, came under intense examination after errors were identified. Their assertion that economic growth significantly slows when debt surpasses 90% of GDP was disputed; subsequent corrections indicated no abrupt decline in growth past this point. Additionally, skeptics raised concerns about conflating correlation with causation.

Despite the controversy, Reinhart and Rogoff stood by the fundamental findings of their research.

A comprehensive reassessment conducted by Herndon, Ash, and Pollin revealed issues such as "coding mistakes, selective omission of data, and atypical weighting methods" that skewed the analysis of the link between public debt levels and GDP growth in developed nations.

Personal life

Carmen Reinhart formed a relationship with her husband, Vincent Reinhart, during their time as classmates at Columbia University in the late 1970s. Together, they have one son.

Selected publications

• Reinhart, Carmen, and Vincent Reinhart. "The Crisis Next Time: What We Should Have Learned from 2008." Foreign Affairs 97.6 (Nov/Dec 2018): 84–97.
• Reinhart, Carmen M., Vincent Reinhart, Christoph Trebesch. "Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815–2015." The American Economic Review 106.5 (May 2016): 574–580.
• Reinhart, Carmen M., and Christoph Trebesch. "Sovereign Debt Relief and Its Aftermath." Journal of the European Economic Association 14.1 (Feb 2016): 215–251.
• Reinhart, Carmen M., and Christoph Trebesch. "The International Monetary Fund: 70 Years of Reinvention." The Journal of Economic Perspectives 30.1 (Jan 2016): 3–27.
• Kenneth Rogoff and Carmen Reinhart. (2010) "Growth in a Time of Debt." American Economic Review 100.2: 573–578.
• Graciela Kaminsky and Carmen Reinhart. (1999). "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems." American Economic Review, 473–500.
• Kenneth Rogoff and Carmen Reinhart. (2009). This Time is Different: Eight Centuries of Financial Folly. Princeton University Press.