IDEAS home Printed from
   My bibliography  Save this article

The global recession: Analysis, evaluation, and implications of the policy response and some reform proposals


  • Michael Sakbani


Purpose - The purpose of this paper is to analyze the evolution of the crisis, its causes and the corrective policy actions with the aim of drawing up from that a set of economics policy and substantive implications and conclusions. Design/methodology/approach - To throw into sharp relief the causes and particular features of the financial crisis, the paper traces the combined evolution of financial innovations and globalization which underscores the eruption of the crisis. It then analyzes the recession and the ensuing policy actions. The US actions are examined in detail by analyzing the pertinent technical, macroeconomics, and political issues. Thereafter, elements of reforms are outlined, which in part draw on the work of the Bank of International Settlements. This leads into substantive and policy conclusions of great significance. Findings - The paper elucidates the major historic changes observed in monetary policy design and execution. It also brings out the changes in the empirical size of the various fiscal policy lags as compared with the received literature. It is argued that if the policy actions succeed the empirical relevance of the modern quantity theory and new classical macroeconomics would be thrown into question. Other set of conclusions involves setting up an internationally coordinated of financial regulations and bank supervision. It is argued that reforming the international monetary system has become unavoidable. There are also a host of specific other conclusions. Originality/value - The conclusions and analysis contained in this paper are totally new. Given their comprehensiveness and global orientation, they will presage in future work, an overdue revision in received macroeconomic theory and financial supervision not seen since the 1960s.

Suggested Citation

  • Michael Sakbani, 2010. "The global recession: Analysis, evaluation, and implications of the policy response and some reform proposals," Studies in Economics and Finance, Emerald Group Publishing, vol. 27(2), pages 91-109, June.
  • Handle: RePEc:eme:sefpps:v:27:y:2010:i:2:p:91-109

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Ethan Kaplan & Dani Rodrik, 2002. "Did the Malaysian Capital Controls Work?," NBER Chapters,in: Preventing Currency Crises in Emerging Markets, pages 393-440 National Bureau of Economic Research, Inc.
    2. Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 85-104, Fall.
    3. Stanley Fischer, 2001. "Exchange Rate Regimes: Is the Bipolar View Correct?," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 3-24, Spring.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:sefpps:v:27:y:2010:i:2:p:91-109. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.