A financial crisis could lead to a lot of things that could cause a recession. Some of those things that could cause a recession are, Bank failures, deficit budget, Internal and external debt, less liquidity for investment purposes. A major cause is inflation which is the general rise in price of goods and services over a period of time. The higher the rate of inflation the smaller the percentage of goods and services that can be purchased with the same amount of money. What caused the recession of 2007-2009 it was the result of a sharp fall-off in consumption due to the unevenly accumulated household debt in the first six years of the 21st century. In that period, mortgage-credit grew more than twice as fast in neighborhoods with low credit
