From what was first believed to be a US-centric subprime mortgage problem, the crisis has since transformed into financial turmoil and further into an economic growth crisis. From the US and Europe, it has spread to the rest of the world. Economies in the periphery suffered market failures characterized by sudden stops as sentiment turned, despite sound policies.
Even countries that did not have strong financial links with the core nations are now being affected through real flows and financial losses on trade activities.