The Causes, Dynamics, and Effects of the Global Economic Crisis

Abstract

This paper examines the financial crisis that started around the middle of 2007 by looking at the causes, dynamics and effects at the global, African, and Nigerian levels. Various literatures were perused, all blaming America’s financial system as one of the causes, if not the main cause of the crisis. With the global dimension, its effects has been characterised by the failure of key businesses, decline in consumer wealth, substantial financial commitments incurred by governments and a significant decline in economic activity. Other indicators of the global financial crisis were in stock markets crash, collapse of large financial institutions or bailout, and governments in even the wealthiest nations having to come up with rescue packages to bail out their financial systems.

Keywords: financial crisis, financial system, toxic mortgages, contagion theory, meltdown, emerging economy