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Lessons for macroeconomic policy from the Global Financial Crisis

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  • Makin, Anthony J.

Abstract

This paper proposes lessons for macroeconomic policy stemming from the monetary and fiscal responses to the 2008–09 Global Financial Crisis, with an emphasis on Australia’s experience. After canvassing hitherto underemphasised global factors leading up to the crisis, including China’s rise and its effect on global saving, external imbalances and world interest rates, the paper critically evaluates the G20’s macroeconomic policy response to the crisis and its public debt legacy, especially for advanced economies. It then revisits Australia’s GFC performance, highlighting its macroeconomic behaviour at the time and the effectiveness of the monetary and fiscal responses. Lastly, it summarises what the episode implies for any future macroeconomic policy response to a crisis.

Suggested Citation

  • Makin, Anthony J., 2019. "Lessons for macroeconomic policy from the Global Financial Crisis," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 13-25.
    • Handle: RePEc:eee:ecanpo:v:64:y:2019:i:c:p:13-25
    DOI: 10.1016/j.eap.2019.07.008
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    More about this item

    Keywords

    Global Financial Crisis; G20; Macroeconomic policy; Australia;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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