There is even a saying that we face not only an economic crisis but also a crisis in economics. 13 As you are of course all too well aware of the evolution of the US financial crisis, I will be brief on the crisis itself, instead focusing on the mechanism of propagation to emerging economies.
The trigger for the crisis was the decline in housing prices in the United States. But, in the run-up to it, three elements had been working to bring about a major global crisis. The first element was credit expansion and asset price increase.