The paper written by Rogoff and Reinhart entitled "The Aftermath of a Financial Crisis" talks about what advanced economies have in common with emerging markets when it comes to financial crisis. According to their studies both the antecedents and the aftermath of a banking crisis in rich countries and emerging markets have a lot in common. They found the equity and housing prices, unemployment, and government revenues and debt have a similar pattern in both spectrums.
In comparing the recent financial crisis in the U.S. with crisis in other 18 developed economies, they noticed that the aftermath of the financial crisis in all of them shared three common characteristics. The first one is that the asset market falls deep, causing housing prices to drop an average of 35 percent and equity prices 55 percent. The second characteristic is associated with declines in output and employment. In average the unemployment rate rises 7 percent and output decreases over 9 percent. Lastly, the third characteristic highlighted by Rogoff and Reinhart is that the real value of government debt tends to explode, rising an average of 86 percent in the major post–World War II episodes.
Next, Rogoff and Reinhart show us a series of charts that compares the depth and duration of the crisis in different countries. These charts include decline in house price, decline in equity price, percent increase in unemployment rate, percent decline in real GDP and the respective duration in years, and Cumulative increase in real public debt in the three years following the banking crisis. All of these chart show that the financial crisis in the U.S. was severe in any metric and any of these subjects.
After a throughout explanation of the numbers presented in the charts and how each of them relate to the economic market in which they happened, Rogoff and Reinhart conclude by saying that due to a less rigid global exchange regime, monetary policies that we have