Research on Real Contagion Mechanism of Financial Crisis

American subprime mortgage crisis has evolved into the global financial crisis. In order to reduce impact of the U.S. financial crisis on the world economy, this paper uses systematic method to analyze the real contagion mechanism of financial crisis. The results show that competitive effect, income effect, effect of cheap imports and competitive devaluation effect are main influencing factors. Conclusion can be made that real contagion can be controlled when measures are taken.