Causes of world Financial crisis 2007-2009 evidence from United States

This paper seeks to explain the causes of the U.S. subprime mortgage crisis, and how this crisis has led to a generalized credit crunch in other financial sectors that ultimately affects the real economy. The currently observed turmoil in financial markets, which is believed to have been ignited by the collapse of the subprime mortgage market, has recently brought to prominence the ideas of Hyman Minsky (1919-1996), a prominent member of the post-Keynesian school of economics. Many commentators are of the view that Minsky's framework of thinking accurately anticipated the current financial crisis Wray (2007), McCauley (2008). Some of them called this situation a "Minsky moment" (Whalen 2007, Magnus 2007). While some economists have the view that Government Actions and Fed's role created and deepened this crisis Taylor (2009). In this paper we would discuss how this crisis started and proceeded? What role U.S housing market played? And how lack of transparency and accountability deepened the crisis?