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We perform a comprehensive comparison between terahertz (THz) time-domain spectroscopy and conventional far-infrared Fourier transform spectroscopy, including radiation source, detector, signal to noise ratio, bandwidth, availability, applications, and their own uniqueness. In terms of signal to noise ratio, THz time-domain spectroscopy is advantageous at low frequencies under 3 THz, while Fourier transform spectroscopy works better at frequencies above 5 THz. In addition, we provide a detailed discussion of the unique features of THz time-domain spectroscopy and its application to dynamic and time-resolved processes. © 2001 American Institute of Physics.