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The Global Financial Crisis and Its Effects

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  • Malcolm Edey

Abstract

The global financial crisis has been one of the most significant economic shocks in the post‐war period. At its core, the crisis originated in credit markets in developed countries – centred particularly in the United States, the United Kingdom and Europe – but the fallout has had a significant effect on activity in every country and region. As the crisis intensified, there was a large swing in the appetite of world financial markets for risk, and in their capacity to accept risk. The result was a shift from the easy credit conditions that had prevailed for some years to a situation of tight credit and in some cases dysfunctional markets. This was accompanied by a loss of consumer and business confidence, with significant effects on global activity. This article focuses on the main causes of the crisis, how it has affected the world economy, and how governments and central banks have responded.

Suggested Citation

  • Malcolm Edey, 2009. "The Global Financial Crisis and Its Effects," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 186-195, September.
  • Handle: RePEc:bla:econpa:v:28:y:2009:i:3:p:186-195
    DOI: 10.1111/j.1759-3441.2009.00032.x
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    References listed on IDEAS

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    1. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.
    2. Stijn Claessens & M. Ayhan Kose & Marco E. Terrones, 2009. "What happens during recessions, crunches and busts? [Business cycles for G-7 and European countries]," Economic Policy, CEPR;CES;MSH, vol. 24(60), pages 653-700.
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    Cited by:

    1. Javid Iqbal, 2019. "Managerial Self-Attribution Bias and Banks’ Future Performance: Evidence from Emerging Economies," JRFM, MDPI, vol. 12(2), pages 1-32, April.
    2. Shahzad, Umer & Sarwar, Suleman & Farooq, Muhammad Umar & Qin, Fengming, 2020. "USAID, official development assistance and counter terrorism efforts: Pre and post 9/11 analysis for South Asia," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    3. Javid Iqbal & Khalid Riaz, 2022. "Predicting future financial performance of banks from management’s tone in the textual disclosures," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(4), pages 2691-2721, August.
    4. Bilgili, Faik, 2017. "Piyasa ekonomisine geçiş süreci ve sonrasında Türkiye'de GINI katsayılarının analizi: Alternatif GINI formülü yaklaşımı [During and after the process of transition to market economy, an analysis of," MPRA Paper 81043, University Library of Munich, Germany.
    5. repec:hal:journl:dumas-00934329 is not listed on IDEAS
    6. Jaqueson K. Galimberti & Nicolas Suhadolnik & Sergio Silva, 2017. "Cowboying Stock Market Herds with Robot Traders," Computational Economics, Springer;Society for Computational Economics, vol. 50(3), pages 393-423, October.
    7. John Magnus ROOS, 2015. "Private Consumption in Sweden and Finland Before, During and After the Global Financial Crisis," Journal of Economics Library, KSP Journals, vol. 2(4), pages 321-328, December.
    8. Pick-Schen Yip & Wee-Yeap Lau & Robert Brooks, 2023. "The Liquidity Effect of the U.S. QE on Sovereign Yield Spreads of Commodity-Exporting Countries," Commodities, MDPI, vol. 2(2), pages 1-16, April.
    9. Faik Bilgili, 2018. "Piyasa Ekonomisine Geçiþ Süreci ve Sonrasýnda Türkiye'de GINI Katsayýlarýnýn Analizi: Alternatif GINI Formülü Yaklaþýmý," Isletme ve Iktisat Calismalari Dergisi, Econjournals, vol. 6(1), pages 36-58.
    10. Günsür, Başak Tanyeri & Bulut, Emre, 2022. "Investor reactions to major events in the sub-prime mortgage crisis," Finance Research Letters, Elsevier, vol. 47(PB).
    11. Petar Sorić & Mirjana Čižmešija & Marina Matošec, 2020. "EU Consumer Confidence and the New Modesty Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 899-921, December.
    12. Yousaf, Imran & Beljid, Makram & Chaibi, Anis & Ajlouni, Ahmed AL, 2022. "Do volatility spillover and hedging among GCC stock markets and global factors vary from normal to turbulent periods? Evidence from the global financial crisis and Covid-19 pandemic crisis," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).
    13. Da Silva, Sergio, 2014. "Why Not Use Robots to Stabilize Stock Markets?," MPRA Paper 60567, University Library of Munich, Germany.
    14. Helder Ferreira de Mendonça & Eduardo Schirmer Finn, 2022. "Can credibility offset electricity price effect on business confidence? An empirical investigation from a large emerging economy," Applied Economics, Taylor & Francis Journals, vol. 54(11), pages 1229-1242, March.
    15. Marcin Olkiewicz, 2022. "The Impact of Economic Indicators on the Evolution of Business Confidence during the COVID-19 Pandemic Period," Sustainability, MDPI, vol. 14(9), pages 1-17, April.

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