The global financial crisis: origin, contagion and impacts on Ethiopia

Abstract

The financial crisis that erupted in September 2008—following more than two years of financial turmoil has become global crisis for the world economy. An attempt is made in this study to assess the possible causes of the origin, contagion and impact of the current global financial crisis with particular emphasis on Africa and Ethiopia. It also provides a summarized historical overview of past global financial crises in view of the economic theories of financial crises. The study utilizes the fundamental economic theories related to financial crisis to depict and illustrate the bigger picture. The paramount importance of this study is a detailed analysis of the current global financial crisis, and its wide ranging impacts by creating a clear link with past financial crises in different regions of the world. The method followed throughout this paper is qualitative and descriptive in nature. The transmission channels for the Ethiopian economy in the study are the knock on effects, external sector and commodity prices, investment, official transfers and remittance and the impact on the flower industry