Analysis on Real Contagion Mechanism of Financial Crisis

Recently the financial crisis triggered by the U.S. sub prime mortgage crisis, has been conducted from credit market to capital market, from financial market to real economy, and has caused great damage to the global economy. In order to explore and block the route for crisis´s further spread in real economy, this paper applies systematic method to analyze the real contagion mechanism of financial crisis, and works out such influencing factors as competitive effect, income effect, effect of cheap imports and competitive devaluation effect, and concludes that real contagion is possible to be controlled.