The Impact of the Great Recession on Monetary and Fiscal Policy in Developed Market Economies
Šehović Damir ()
Additional contact information
Šehović Damir: University of Montenegro, Faculty of Economics, Podgorica, Montenegro
Business Systems Research, 2015, vol. 6, issue 1, 56-71
Background: With the occurrence of the crisis in 2007, which caused the largest economic contraction since the Great Depression in the thirties, it has become evident that the previous understanding of strategies, effects and roles of monetary and fiscal policy should be redefined. Objectives: The aim of this paper is to illustrate a possible expected change in monetary and fiscal policy in developed market economies that could occur as a consequence of the Great Recession. Methods/Approach: The paper provides a comparative analysis of various primary economic variables related to the developed OECD countries, as well as the empirical testing of the selected theoretical assumptions. Results: The changes in monetary policy refer to the question of raising target inflation, considering a possible use of aggregate price level targeting and paying attention to the role of central banks in suppressing the formation of an asset bubble. The success of fiscal policy in attaining stabilization depends on the size of possible fiscal measures and creation of automatic stabilizers. Conclusions: For the most part, monetary and fiscal policies will still stay unchanged, although some segments of these policies need to be improved.
Keywords: the Great Recession; monetary policy; fiscal policy; flexible inflation targeting; asset bubble; fiscal space; automatic stabilizers (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bit:bsrysr:v:6:y:2015:i:1:p:56-71
Access Statistics for this article
Business Systems Research is currently edited by Mirjana Pejić Bach
More articles in Business Systems Research from Sciendo
Bibliographic data for series maintained by Peter Golla ().