Answer to Question #62054 in Macroeconomics for Jessica

Question

The financial crisis of 2008 caused macroeconomists to rethink monetary and fiscal policies. The true question is whether we are headed down the same path, and if the "victims" of the 2008 crisis have done anything to shift the tide?

Answer 1

Almost all the world face financial problems in the period of crisis of 2008. It consequences can be felt even now. However, there were serious regulatory responses taken in order to minimize and avoid any similar issues. Among others in USA these were: broad-based guarantees of bank accounts, money market funds and liquidity by the Federal Reserve; adopting the law creating the Troubled Asset Relief Program (TARP); Dodd-Frank Wall Street Reform and Consumer Protection Act was adopted. Due to these actions the financial consequences of that economic collapse are not so disastrous now.