Deleveraging

According to McKinsey's『Debt And Deleveraging』, many countries are striving to deleverage in order to reduce the fiscal deficits that heightened after the 2008 financial crisis, and as the financial sector withdraws liquidity while expanding its capital, economic growth may slow down. Deleveraging tends to begin about two years after a crisis starts, and GDP contracts for the first 2∼3 years after deleveraging begins before growing again.

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Topics: Ray Dalio,Cyclical stocks,Recession
Category: Wiki/Economy