Monetary and fiscal policy in the Great Moderation and the Great Recession

2015 ◽  
Vol 31 (2) ◽  
pp. 134-167 ◽  
Author(s):  
Christopher Allsopp ◽  
David Vines
Keyword(s):  
Fiscal Policy ◽  
Great Recession ◽  
Great Moderation ◽  
The Great Recession ◽  
Monetary And Fiscal Policy

scholarly journals Activist Fiscal Policy

2010 ◽  
Vol 24 (4) ◽  
pp. 141-164 ◽  
Author(s):  
Alan J Auerbach ◽  
William G Gale ◽  
Benjamin H Harris
Keyword(s):  
Fiscal Policy ◽  
Interest Rates ◽  
Great Recession ◽  
Economic Conditions ◽  
Fiscal Policies ◽  
The Great Recession ◽  
Policy Interventions ◽  
Low Interest Rates ◽  
The Many ◽  
Monetary And Fiscal Policy

During and after the “Great Recession” that began in December 2007 the U.S. federal government enacted several rounds of activist fiscal policy. In this paper, we review the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy. Although fiscal interventions aimed at stimulating and stabilizing the economy have returned to common use, their efficacy remains controversial. We review the debate about the traditional types of fiscal policy interventions, such as broad-based tax cuts and spending increases, as well as more targeted policies. While there have been improvements in estimates of the effects of broad-based policies, much of what has been learned recently concerns how such multipliers might vary with respect to economic conditions, such as the credit market disruptions and very low interest rates that were central features of the Great Recession. The eclectic and innovative interventions by the Federal Reserve and other central banks during this period highlight the imprecise divisions between monetary and fiscal policy and the many channels through which fiscal policies can be implemented.

scholarly journals The Impact of the Great Recession on Monetary and Fiscal Policy in Developed Market Economies

2015 ◽  
Vol 6 (1) ◽  
pp. 56-71 ◽  
Author(s):  
Damir Šehović
Keyword(s):  
Fiscal Policy ◽  
Great Recession ◽  
Fiscal Policies ◽  
Market Economies ◽  
The Great Recession ◽  
The Great Depression ◽  
Theoretical Assumptions ◽  
Monetary And Fiscal Policy ◽  
The Impact

Abstract 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.

scholarly journals Fiscal Policy and Aggregate Demand in the U.S. Before, During and Following the Great Recession

2017 ◽  
Vol 2017 (061) ◽  
Author(s):  
David Cashin ◽  
◽  
Jamie Lenney ◽  
Byron Lutz ◽  
William Peterman ◽  
...  
Keyword(s):  
Fiscal Policy ◽  
Great Recession ◽  
Aggregate Demand ◽  
The Great Recession ◽  
The U.S

scholarly journals DOES THE GREAT RECESSION IMPLY THE END OF THE GREAT MODERATION? INTERNATIONAL EVIDENCE

2018 ◽  
Vol 56 (2) ◽  
pp. 745-760 ◽  
Author(s):  
Amélie Charles ◽  
Olivier Darné ◽  
Laurent Ferrara
Keyword(s):  
Great Recession ◽  
Great Moderation ◽  
The Great Recession ◽  
International Evidence

Fiscal Policy and Recovery from the Great Recession

1983 ◽  
Vol 9 (1) ◽  
pp. 53 ◽  
Author(s):  
Neil Bruce ◽  
Douglas D. Purvis
Keyword(s):  
Fiscal Policy ◽  
Great Recession ◽  
The Great Recession

Central Banking before the Great Recession

2018 ◽  
Author(s):  
Francesco Papadia ◽  
Tuomas Vӓlimӓki
Keyword(s):  
Central Bank ◽  
Great Recession ◽  
Financial Stability ◽  
Central Banks ◽  
Central Banking ◽  
Price Stability ◽  
Great Moderation ◽  
The Great Recession ◽  
Advanced Economies ◽  
The Interest Rate

The chapter describes the historical process as well as the analytical and empirical factors that, at the end of the twentieth century, led to the dominance, in advanced economies, of a central bank model based on an independent institution devoted to price stability as its overriding objective. The central bank pre-crisis model was elegant, performing, and efficient. However, it could not easily accommodate the pursuit of a traditionally important central bank objective: financial stability. Indeed, since central banks have, in essence, just one tool, that is, the interest rate, the pursuit of a financial stability objective in addition to a price stability objective could create dilemma situations. In the two decades between the mid-1980s and the mid-2000s, the economies of advanced economies were very stable, and this period was thus identified as Great Moderation. However, subsequent experience showed that, in this period, the crisis was incubating.

Central Banking after the Great Recession

2018 ◽  
Author(s):  
Francesco Papadia ◽  
Tuomas Vӓlimӓki
Keyword(s):  
Interest Rate ◽  
Central Bank ◽  
Great Recession ◽  
Financial Stability ◽  
Central Banking ◽  
Global Perspective ◽  
Quantitative Easing ◽  
The Great Recession ◽  
The Interest Rate ◽  
Monetary And Fiscal Policy

The central banking model prevailing before the Great Recession suffered six hits during the crisis. First, new financial stability responsibilities created dilemmas in the use of the interest rate. Second, quantitative easing blurred the borders between monetary and fiscal policy. Third, the action to support banks and, in the euro-area, peripheral sovereigns created moral hazard. Fourth, the ECB had to take on itself the task of preserving the euro. Fifth, the ECB had to participate in the so-called troika. Sixth, both the Fed and the ECB had to adopt a more global perspective. This chapter concludes that these hits have not basically jeopardized the pre-crisis central bank model. Still, four of the six hits to the pre-crisis central bank model identified above have a good probability of requiring changes in the pre-crisis model, thus some incremental adaptations to that model are proposed.

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