Are All the Sacred Cows Dead? Implications of the Financial Crisis for Macro and Financial Policies
The recent global financial crisis has shaken the confidence of developed and developing countries alike in the very blueprint of financial and macro policies that underlie the western capitalist systems. In an effort to contain the crisis from spr...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090105103551 http://hdl.handle.net/10986/4005 |
| Summary: | The recent global financial crisis has
shaken the confidence of developed and developing countries
alike in the very blueprint of financial and macro policies
that underlie the western capitalist systems. In an effort
to contain the crisis from spreading, the authorities in the
US and many European governments have taken unprecedented
steps of providing extensive liquidity, giving assurances to
bank depositors and creditors that include blanket
guarantees, and structuring bail-out programs that include
taking large ownership stakes in financial institutions, in
addition to establishing programs for direct provision of
credit to non-financial institutions. Emphasizing the
importance of incentives and tensions between short term and
longer term policy responses to crisis management, this
paper draws on a large body of research evidence and country
experiences to discuss the implications of the current
crisis for financial and macroeconomic policies going forward. |
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