We have just seen how underlying macroeconomic imbalances accumulated over the years. However, problems were deeply rooted in the economy well beyond macroeconomic variables; they were also present in the financial sector. Chapter 3 reviews some of the triggers that led to the global financial crisis and shows how the crisis spread across sectors and throughout the European economy.
The Real Estate Bubble in the United States
The mortgage market developed extraordinarily in the United States over the 2000s. Housing prices had been consistently increasing for years. Financial innovation allowed for many people to buy properties beyond their means. They were also encouraged by the government to do so to boost growth, particularly ...
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