The Emerging Global Financial System

Robert Pringle
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Robert Pringle: Central Banking Publications

Chapter 15 in The Money Trap, 2014, pp 267-290 from Palgrave Macmillan

Abstract: Abstract Policies by which governments attempted to steer their economies out of recession, balancing plans for medium- and longer-term fiscal consolidation with short-term fiscal and monetary stimuli, met with only limited success in the years following FinCR. Austerity for ever was out of the question on political grounds; a bigger fiscal boost was ruled out in most advanced countries by fears of market reaction to public indebtedness.1 Structural changes to cut unemployment — such as policies to free up markets, raise levels of skills, increase competition and ease restrictions in product markets — would take years to show results. Central banks had reached — some would say they had exceeded — the limits of what they could do without running unacceptable risks of further, even bigger, credit-fuelled booms and busts. Meanwhile, the uncertainty gripping financial markets could at any time erupt in further turbulence that would again set back hopes of a full recovery. It was uncertain whether fast-growing emerging market economies could continue their rates of growth in the face of weak demand in most advanced economies. The US, as usual, seemed to be a bright spot, but longer-term prospects there too were uncertain. Policy-makers around the world lived in fear.

Keywords: Exchange Rate; Monetary Policy; Central Bank; Euro Area; Balance Sheet (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-39275-5_15

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DOI: 10.1057/9780230392755_15

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