The US financial crisis, global financial turmoil, and developing Asia: is the era of high growth at an end?

The global economy is threatened with a deep and prolonged recession as a consequence of the financial meltdown that began with the housing price crisis in the United States. The financial implications of the global macroeconomic imbalances that have persisted and enabled the housing bubble to develop with the spread of toxic mortgage-backed securities first became apparent in September and October 2008 with the collapse of major investment banks and mortgage loan institutions, and the credit freeze and the panic that ensued in global equity markets. This paper provides a summary of these events and the transmission of the crisis from the United States to United Kingdom, the eurozone, other industrial economies, emerging markets, and developing Asia.