ABSTRACT
The most common use of history in financial crises is that history can be a source of policy advice. In the aftermath of the 2007 crisis, the policy-related use of history is really common. That is what makes Nikolaus Wolf's analysis in the present volume so compelling. There is history as a source of patterns. This is what presumably the Chartered Financial Analyst Society (CFA) was primarily thinking of when it recommended more history lessons. The protracted financial and economic crisis has discredited first the United States, then the European model of capitalism, and not it looks as if the Asian example takes some knocks too. Then came the European crisis, with its roots in lax government finance in some countries. The best way of thinking about history is as a way of testing conventional hypotheses particularly when those hypotheses are being used to create market opportunities by making for false confidence, but also by engendering exaggerated despair.
