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The recent financial and economic crisis has witnessed the use of conventional and alternative monetary policy...

The recent financial and economic crisis has witnessed the use of conventional and alternative monetary policy instruments. Critically discuss the main differences and commonalities between the crisis impact and solutions in both developed and developing countries.

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Answer #1

Crisis impact has been worst in developing countries largely due to inefficiency of fiscal stimulus and large scale expenditure using fiscal and monetary policy tools.

However, solutions generated in both developing and developed countries have Similiarity of fiscal stimulus packages and automatic stabilizers which are oftenly seen.

The only difference is the scale and magnitude of fiscal packages as well as tax cuts and central bank bond buying programmes at unprecedented rate which is seen in dveeloped nations.

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