Survey on economic policies during the crisis

Felipe Serrano and Amaia Altuzarra

Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project

Abstract: The Global Financial Crisis has meant for developed countries to return to an economic situation similar to that experienced during the Great Recession. At the root of the crisis, again, is the financial system. Financial innovation, combined with stringent regulatory failures and with an overly loose monetary policy, allowed to expand private credit disproportionately, fuelling a speculative bubble that, when it burst, generated a demand shock that eventually turn a financial crisis into an economic crisis with lasting consequences. This work attempts to examine the economic policies implemented during the crisis. We focus exclusively on demand policies, with special attention to those implemented in the first phase of the crisis. The economic policy implemented to overcome the crisis has passed through different stages. In the first stage, the strategy was a combination of expansionary monetary and fiscal policies. In the second stage, the fiscal stimuli begin to be withdrawn, while an aggressive monetary policy to stimulate private credit through expanding the money supply is maintained. The third stage is scheduled to start in late 2014. This third phase would be characterized by the end of demand policies and the recovery of supply policies or structural adjustment policies, especially for the case of emerging economies as well as economies of southern Eurozone.

Keywords: fiscal policy; monetary policy; Eurozone; emerging countries; developed countries; financial crisis (search for similar items in EconPapers)
JEL-codes: E02 E52 E58 E62 F45 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2015-04-01
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:fes:wpaper:wpaper107

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