Financial Crisis Contagion
The International Financial Crisis Contagion:
A Brief Analysis of The Last Financial Crisis & It’s Effect On Global Economics
By Carlos
April 29, 2013
Table of Contents
Introduction
Origins of The 2007-2009 Financial Turmoil
The Contagion and Its Effect On Global Economy
Preventing Another Crisis
Epilogue
Introduction
Financial contagions have recently become of much interest to many economist and financial experts throughout the world, as a way to better understand the effects of a financial crisis. Moreover, a financial crisis could originate within a company or industry of a market – in other words, it could begin at a domestic level – eventually affecting an entire industry that consequently may affect other industries that are also crucial for the survival of the market. Finally, the crisis could work itself up into the global scene and develop into an international financial crisis, bringing chaos to the entire global economy. Due to its similarity of spread that it has with a medical disease, the term “contagion” continues to proof itself as a new concept to be accepted in economics; as more findings continue to support the research that financial crises are highly contagious and spread even faster when key member(s) of the market are very close in contact – so close that any sort of disturbance, positive or negative, within any of these members would have an effect on the other members. Very similar to a medical disease that spreads dangerously faster when individuals have constant close contact with one another, causing it sometimes to become an epidemic – in some rare cases the spread of such epidemic diseases have been so intense that it has threaten it’s very own survival as it ran out of hosts to continue its growth. In these rare cases many perished and only a change in attitude and habits have managed to end the spread. However, when it comes to the world of economics and finance, some these disturbances have been
A Brief Analysis of The Last Financial Crisis & It’s Effect On Global Economics
By Carlos
April 29, 2013
Table of Contents
Introduction
Origins of The 2007-2009 Financial Turmoil
The Contagion and Its Effect On Global Economy
Preventing Another Crisis
Epilogue
Introduction
Financial contagions have recently become of much interest to many economist and financial experts throughout the world, as a way to better understand the effects of a financial crisis. Moreover, a financial crisis could originate within a company or industry of a market – in other words, it could begin at a domestic level – eventually affecting an entire industry that consequently may affect other industries that are also crucial for the survival of the market. Finally, the crisis could work itself up into the global scene and develop into an international financial crisis, bringing chaos to the entire global economy. Due to its similarity of spread that it has with a medical disease, the term “contagion” continues to proof itself as a new concept to be accepted in economics; as more findings continue to support the research that financial crises are highly contagious and spread even faster when key member(s) of the market are very close in contact – so close that any sort of disturbance, positive or negative, within any of these members would have an effect on the other members. Very similar to a medical disease that spreads dangerously faster when individuals have constant close contact with one another, causing it sometimes to become an epidemic – in some rare cases the spread of such epidemic diseases have been so intense that it has threaten it’s very own survival as it ran out of hosts to continue its growth. In these rare cases many perished and only a change in attitude and habits have managed to end the spread. However, when it comes to the world of economics and finance, some these disturbances have been
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