Foundations for Analyzing the Financial Crisis

Abstract

The extraordinary speed under which the financial crisis in the United States took place and its contagion to the rest of the world’s economies has led to analysts and politicians to focus on the discussion of the solutions to retake the path of growth and wellbeing and the time to go through the crisis. Although the arguments and the proposals might be well intended it is true, however, that few space has been devoted to analyze the causes of the crisis. Even more, when no attention is placed on these causes, governments can miss efficient and effective solutions to mitigate the problem. Therefore, this article pretends to lay down the foundations to identify the potential causes and assess them from not only the economic point of view but also from the political economy side. The article does not go into the consequences of the crisis for which more time is needed for data to collect and other events to unfold.