Do you think that this time the impact of the crisis on on real economies will be stronger than on financial sectors?
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Answer:
savior of a ⛅consux
The present crisis was caused by a combination of asset price bubbles, mainly in the real estate sector, and a credit bubble that led to excessive leverage. This is by now well accepted. We also showed in a previous contribution1 that Europe (and in particular the euro area) was affected by both “bubble” symptoms as much as the USA. House prices increased as much in Europe as in the USA, and on most indicators of leverage or excessive credit expansion the euro area also did worse than the USA (in particular the corporate and financial sectors show a higher degree of leverage in Europe than in the USA, and the increase was higher in Europe as well). From this perspective, it is not surprising that Europe also experienced a deep crisis.