In Cyprus the recession and stagnation that characterises the response of the local economy to the international economic and financial crisis have concentrated on the issues of changes in output (GDP), the budget deficit, the sovereign credit ratings, the banks and the effects of the Greek crisis, but very little has been said about the wealth effects of the crisis. This is in contrast to the United States where wealth is at the centre of discussion, in terms of both the origins of the crisis, notably non-performing mortgage loans, heavily borrowed households, leading to toxic bonds and the collapse of house prices and a lower or stagnant demand by the population at large. In Cyprus, however, the sequence of events has been more complex and in some ways more surprising.
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