National Monetary Policy Responses in the COVID-19 Epidemic

Abstract

The COVID-19 pandemic has had a significant influence on the economies of many different nations in the world. When the economy suffers a severe blow, monetary policy should help it get back on its feet. Building the home market and maximizing industrial allocation is now especially crucial because the COVID-19 outbreaks have made it difficult for countries to conduct normal commercial exchanges. The COVID-19 also exhibits the traits of persistent global epidemics. Every new outbreak of the disease has a detrimental effect on the economy and severely undermines consumer confidence. National monetary policy from the world's major central banks was quicker, broader, moreover, the response to the economic and financial crisis of COVID-19 was more broad than the one to the global financial crisis of 2008. The response of three major nations, including the United States, the United Kingdom, and China, to the COVID-19 will be critically analyzed in this paper. However, there are many potential threats to the government's easing of monetary policy to keep the economy stable while stopping the spread of the pandemic, which means that persistently low interest rates are no longer a sustainable option. Therefore, balancing the financial chaos and social problems caused by monetary policy is the key to ensure the sustainable development of the country.