Analysis: Addressing Inflation and Preventing Recession through Fiscal Policy and Monetary Policy
Abstract
economic issues are combating inflation while precluding further recession. This paper mainly concentrates on the fiscal policies and monetary policies in both short run and long run that can solve the economic issue above. The authors first recommend increasing government
expenditures as the short run fiscal policy. For the long run fiscal policy, the authors introduce several tax policies which can boost economic
growth while stabilizing prices. Besides, the authors recommend short term monetary policies, open market operation and forward guidance,
to tackle the economic issue. Next, authors propose the quantitative easing as a long run monetary policy. After listing some specific polices
that address inflation while prevent recession, authors then discuss the pros and cons of four kinds of monetary and fiscal policy combination
under differentiated economic conditions.
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DOI: http://dx.doi.org/10.18686/fm.v9i3.12764
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