Starting in mid-2007, the global financial crisis quickly metamorphosed from the bursting of
the housing bubble in the US to the worst recession the world has witnessed for over six
decades. Through an in-depth review of the crisis in terms of the causes, consequences and
policy responses, this paper identifies four key messages. Firstly, contrary to widely-held
perceptions during the boom years before the crisis, the paper underscores that the global
economy was by no means as stable as suggested, while at the same time the majority of …

The historical perspective provided in chapter 1 on the decades leading up to the financial
crisis shows that the global economy was by no means as stable as had been suggested by
many observers. That said, the crisis was largely unexpected and due to its complex roots, it
continued to puzzle policymakers, economists and other commentators as it unravelled and
sucked in at first banks and companies, and then economies across the globe. The collapse
in the real economy has had devastating consequences for households as a result of rising …