Utilizing Monetary & Fiscal Policy - Economicus

by, Mandi Tabaku

Abstract

Monetary and fiscal policy has been around for decades, and they have been very influential instruments in steering economic activity and financial markets. It is through the understanding and implementation of such policies that governments are able to rescue their countries from recessions that could have potentially ended in economic collapse. Over the decades countries have evolved, and when faced with the great recession of 2008, they have had to take unprecedented monetary and fiscal measures. It is through the aggressive use of such measures that countries around the world were able to minimize the size and length of the great recession that started in 2008. It’s by understanding and analyzing monetary and fiscal policy that a country can take successful measures towards preventing economic disasters and leading economies to their full potential. Faced with the great recession of 2008, Unites States took the biggest fiscal and policy measures ever in its history with more then a trillion dollars injected in the economy through conventional and unconventional channels. (Mankiw, n.d. 97-98) The myriad of monetary and fiscal measures implemented during the great recession of 2008 show that monetary and fiscal policy is still an evolving field of study and that countries should be constantly thinking of new policy measures that can be readily implemented in the event of a future economic disaster and quickly reversible once growth is achieved.