The Global Financial Crisis of 2008: Regulations Explained Computationally
Dissecting the most impactful financial crisis in history, how monetary policy influenced the recovery from the crisis, and analyzing Quantitative Easing under the lease of statistical analysis.
1. The Global Financial Crisis of 2008 Explained
The Roots
The global financial crisis has had its roots far before 2008, but it wasn’t until September 2008 that its effects were heard throughout the globe. In order to understand the root causes of the global financial crisis, we have to take a look at the economic conditions leading up to it in the United States and other countries. The economic situation was stable and in growth, with relatively low interest rates and inflation.
These favorable conditions paved the way for increased levels of activity for consumers and an overall increase in well-being. Therefore, more and more people started buying houses, and the prices started growing steadily. These purchases however were made through the use of borrowed funds through mortgage loans. In the United States many of these loans were of an amount almost equal to the de facto purchase price of the houses.
