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Aftermath of the 2008 Financial Crisis - Report Example

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This work "Aftermath of the 2008 Financial Crisis" describes the recovery process of the economic crisis especially in relation to the economic tools of monetary and fiscal policies that have been found to be effectual to reheat the crisis. The author outlines the major consequences of the crisis in both developed and emerging countries…
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Aftermath of the 2008 Financial Crisis
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Download file to see previous pages Some major US banks made easy availability of housing loans to its customers, which in turn had led to unprecedented debt-levels, as accounted to be three times the GDP in the US and Europe. Many of the banks’ customers defaulted in repayments of these loans and this bubble burst added liquidity and caused bankruptcy and closing down of these banks. The total economic impact of this crisis has been accounted for as one-third of the total values of all companies worldwide. More significantly and obviously, millions of employees lost their jobs and many of them were pushed to poverty.
When the recent financial turmoil has hit several economies worldwide, it was observed that due to the crisis, assets prices have been inflated, currents accounts reported larger deficits, and slowed-down economic growth of most nations. Though these were quite commonly reported and widely discussed impacts of the crisis, changes in equity prices, employment, and output were more dangerous impacts being studied and reviewed by some literature. Reinhart and Rogoff (2009, p. 466) found that financial crises in rich countries and emerging markets like Brazil, Russia, India, and China have caused tremendous changes in economic variables in common. Broadly speaking, there have been major changing-patterns in housing and equity prices, unemployment rate, government revenues, and debt. They detailed that the major three impacts of the global credit crisis were a) collapse in assets market, b) profound declines in output and increase in unemployment, and c) government’s debt explosions.
The financial crisis has caused the accumulation of a stock of wealth with greater risks and losses in stock markets in almost all developed and emerging economies. The losses in the stock market have been accounted for as between 30 and 70 percent in 2008. The value of fund-assets has been declined by 25 or more percent by 2008 September and 2009 April. A number of companies found that their capitalization as already wiped out and as a result many such companies became bankrupt. One very significant sign of this crisis has been falling housing prices in all those crisis-hit countries (Germain 2009, p. 672). ...Download file to see next pagesRead More
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Aftermath of the 2008 Financial Crisis Report Example | Topics and Well Written Essays - 1500 Words - 1. https://studentshare.org/macro-microeconomics/1749827-the-aftermath-of-the-global-financial-crisis-2007-2008.
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