Economic policy response to internal and external shocks

Reakce hospodářské politiky na vnitřní a vnější šoky

Pavel Morda

Český finanční a účetní časopis, 2020, vol. 2020, issue 1, 41-62

Abstract: The paper focuses on the reactions of economic policy to external and internal shocks. It refers to the current economic situation caused by the COVID-19 pandemic that generated a combination of internal and external negative economic shock and an unprecedented termination of some sectors or industries. The aim of the paper is to observe the change in economic policy responses over the last decade by comparing a monetary and fiscal policy responses after the outbreak of the global financial crisis in 2008 with the current economic situation. Most of the observed states indicated faster and stronger reactions of economic policy during the COVID-19 pandemic in comparison to the global financial crisis. The change may be explained by the expectation of a larger economic downturn caused by an abnormal negative shock, however a possible transformation in the ability of the economic policy to react should be also considered as a conceivable reason. The dynamics of the responses was observed especially in the case of fiscal policy, which corresponds to the consensus of the authors of the literature.

Keywords: Fiscal Policy; Economic crisis; Monetary Policy; Fiskální politika; Hospodářská krize; Měnová politika (search for similar items in EconPapers)
JEL-codes: E32 E52 E62 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.18267/j.cfuc.543

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