The Global Financial Crisis has had severe fall out for the economies worldwide. Almost every single economy now faces deceleration of varying magnitude in economic growth, increased unemployment, increased fiscal burden, heightened currency volatility and so on. The real sector developments are gloomy and challenging; but evolution of the price process in the financial markets worldwide during this period is truly interesting.
Let us recall that prior to the onset of the financial crisis, there was optimism all around; risks were underpriced and prices of all assets were moving heavenwards. As soon as the crisis broke out, markets crashed and prices bottomed out. The response of the monetary and fiscal authorities worldwide was swift and overwhelming.