Economic policy and the financial and economic crisis

Kowalski, Tadeusz (2011): Economic policy and the financial and economic crisis. Published in: Working papers, Faculty of International Business and Economics No. WP/2011/01 (August 2011): pp. 1-15.

Abstract

The aim of this paper is to present and evaluate the theory and principles of economic policy applied before the 2008-2009 crisis1. Against this backdrop we will attempt to describe the evolution of targets and tools of economic policy in view of the experiences of recent years and the conditions of the globalization in this time. The first Section contains an outline of the world economic situation after 1945. Section two includes presentation and evaluation of the evolution of economic policy theory which co-created the conditions for world economic growth and stabilization in recent decades. The third Section describes macroeconomic mechanisms and conditions of economic policy directly preceding the 2007-2011 situation, and provides an analysis of the 2008-2009 crisis implications for the theory and future practice of economic policy. The paper is summed up in a conclusion.

• Item Type: MPRA Paper
• Language: English
• Keywords: quantitative policy, qualitative policy, monetary policy, exchange-rate policy, financial and economic crisis, globalization
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E30 - General; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination

References

Blanchard, O., Dell’Ariccia, G., Mauro, P., 2010. Rethinking Macroeconomic Policy, IMF Staff Position Note, February 12.

Blanchard, O., Cottarelli, C., 2010. Ten Commandments for Fiscal Adjustment in Advanced Economies, iMFdirect, posted on June 24.

Blinder, A.S., 2010. The Practice of Monetary and Fiscal Policy, The Wall Street Journal, 25 October.

Eichengreen, B., 1999. The European Economy Since 1945. Coordinated capitalism and Beyond, Princeton University Press, Princeton and Oxford.

Findlay, R., O’Rourke, K.H., 2004. Power and Plenty. Trade, War, and the World Economy in the Second Millennium, Princeton University Press, Princeton and Oxford.

Fogli, A., Perri, F., 2006. The “Great Moderation”and the US External Imbalance, NBER Working Paper Series, WP no. 12708.

Frenkel, J.A., ed., 1998. The Regionalization of the World Economy, NBER, The University of Chicago Press, Chicago and London.

Geyer, H.S. ed., 2006. Global Regionalization. Core Peripheral Trends, Edward Elgar,Cheltenham.

Gilpin, R., 2000. The Challenge of Global Capitalism, Princeton University Press, Princeton.

Gorynia, M., Kowalski, T., 2008, Globalne i krajowe uwarunkowania funkcjonowania polskich przedsiebiorstw, Ekonomista, no. 1.

Gorynia, M., Kowalski, T., 2009. Nauki ekonomiczne a kryzys gospodarczy, Studia Ekonomiczne, Economic Studies, no. 3-4.

(The) Great Thrift Shift, 2005. Survey, World Economy, The Economist, September 22.

Hitiris, T., 2003. European Union Economics, FT-Prentice Hall, Harlow.

Kirschen, E.S., et al., 1964. Economic Policy in Our Time – General Theory, vol. 1, North-Holland Publishing Company, Amsterdam.

Kowalik, T., 2002. Kapitał globalny a tendencje egalitarne i antyegalitarne, in: Liberska B. ed., Globalizacja. Mechanizmy i wyzwania, PWE, Warszawa.

Kowalski, T., 1987, Nowa klasyczna makroekonomia a polityka stabilizacji gospodarczej w kapitalizmie, Ruch Prawniczy, Ekonomiczny i Socjologiczny, no. 2.

Kowalski, T., 1999. Azjatycki kryzys finansowy – próba interpretacji, Penetrator. Nasz Rynek Kapitałowy, marzec.

Kowalski, T., 2001. Proces formułowania oczekiwan a teoria cyklu wyborczego. Implikacje dla polityki gospodarczej, Wydawnictwo AE w Poznaniu, Poznan.

Kowalski, T., 2002. The Simonian Bounded Rationality Hypothesis and the Expectation Formation Mechanism, Poznan University of Economics Review, vol. 2, no. 1.

Kowalski, T., 2009. Makroekonomiczne uwarunkowania kryzysu 2008-.... . Odpowiedzialnosc i wyzwania wobec banków centralnych, paper presented at a conference on ‘Polityka Pieniena w Dobie Kryzysu (z okazji X-lecia istnienia Katedry Teorii Pieniadza i Polityki Pienienej’, Uniwersity of Economics in Poznaniu, 26 November, 2009.

Lucas, R., 1973. Econometric Policy Evaluation: A Critique, w: The Philips Curve and Labor Markets, K. Brunner, A.H. Metzler eds., Oxford University Press, Amsterdam.

Marglin, S.A., Schor, J.B., eds., 1990. The Golden Age of Capitalism. Reinterpreting the Postwar Experience, Clarendon Press. Oxford.

Muth, J., 1960. Rational Expectations and the Theory of Price Movements Movements, Econometrica,July, vol. 29, 3.

Olson, M., 1996. The Varieties of Eurosclerosis: the Rise and Decline of Nations since 1982, in: Crafts, N., Toniolo, G., 1995. Economic Growth in Europe since 1945, CEPR, Cambridge University Press, Cambridge.

Pelkmans, J., 2006. European Integration. Methods and Economic Analysis, the Third Edition, FT-Prentice Hall, Harlow.

Taylor, J.B., 1993. Discretion versus Policy Rules in Practice. Carnegie-Rochester Conference Series on Public Policy 39, December.

Taylor, J.B. (ed), 1999. Monetary Policy Rules. Chicago: University of Chicago.

Taylor, J.B., 2010. Getting Back on Track, FR Bank of St. Review, vol. 92, no. 3.

Tinbergen, J., 1955. On the Theory of Economic Policy, North-Holland Publishing Company,Amsterdam.

Tinbergen, J., 1956. Economic Policy. Principles and Design, North-Holland Publishing Company, Amsterdam.