The role of monetary policy in the economic recovery following the 2008-2009 global financial crisis with special reference to small states

Abstract

The objective of this paper is to analyse the role of monetary policy in the economic recovery following the global financial crisis of 2008 and 2009, with special reference to small states. The study is based on a desk-study utilising published data on 178 countries applied to an econometric model. The regression results showed that both monetary and fiscal measures had a statistically significant effect on the post-recession economic growth (i.e. during 2009 and 2010). The results also indicate that in the case of small states, as a group, monetary measures may have been more important than fiscal measures in mitigating the effects of the global recession.