Policy Response After the Great Financial Crisis
- https://doi.org/10.2991/aebmr.k.220307.454How to use a DOI?
- Great Financial Crisis; Great Recession; U.S; Monetary Policy; Fiscal Policy; Quantitative Easing; Forward Guidance; Troubled Asset Relief Program; TARP
The Great Financial Crisis was the worst financial crisis since World War II, which plunged the global economy into a full-blown and sustained recession. This paper tries to explain the smooth but slow recovery after the crisis in the U.S. by evaluating the effectiveness and impact of three prime policy responses, including Quantitative Easing (QE), Forward Guidance (FG), and the Troubled Asset Relief Program (TARP). It is found that 1) QE helped the U.S. overcome the crisis by providing liquidity and stimulating consumption and investment, but some limitations made it not as effective as expected, which partly accounts for the slow recovery; 2) FG was helpful to the recovery through its explicit policy interpretation and additional information on economic conditions, but its impact was quite implicit and easily disturbed or overlapped by other policies; 3) the critical support of the TARP helped rebuild market confidence and reverse the deteriorating economic situation, but it created potential risks and shifted the pain from the present to the future.
- © 2022 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Jince Chen AU - Yuanyuan Li AU - Chengmai Zhang AU - Yufei Ye PY - 2022 DA - 2022/03/26 TI - Policy Response After the Great Financial Crisis BT - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022) PB - Atlantis Press SP - 2786 EP - 2798 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.220307.454 DO - https://doi.org/10.2991/aebmr.k.220307.454 ID - Chen2022 ER -