Causes and Consequences of the Financial Crisis of 2007-2009‪.‬

By the early fall of 2009, the business contraction that began in December 2007 appeared to be ending, (1) but the outlook, remained hazy. Despite a number of "green shoots," as Federal Reserve Chairman Ben Bernanke liked to put it, (2) the data were not decisive enough to declare the end of the contraction. Employment was still falling through September 2009. (3) Although in October 2009 it certainly seemed that the economy was near the bottom, it was not safe to say that the crisis was history. (4) Nevertheless, much is already known about the causes of the financial crisis and government responses to it, permitting a much more than speculative review. David Wessel has provided a superb blow-by-blow account of events during the crisis; (5) there is no point in repeating that account here. Nevertheless, a brief chronology of the phases of the financial crisis should help to organize the discussion.