The impact of monetary policy interventions on economic stability during global pandemics; a case study of the United States’ monetary policy initiatives in the fight against the Covid 19 pandemic

Abstract

The study assesses the importance of monetary policy in the fight against global pandemics. Specifically, the study delves into United State’s monetary policy responses to the unprecedented COVID 19 pandemic; a global pandemic that pushed governments across the globe to institute strict measures as well as impose restrictions in their quest to contain the virus and ultimately minimize its economic ramifications. As such, the study compares the impact of monetary policy on economic growth (Real GDP) during the pandemic as against the pre-pandemic periods with the goal of assessing its relative impact on ensuring economic stability. The research shows that the impact of traditional monetary policy tools on economic stability and growth diminished during the Covid 19 pandemic compared to the pre-pandemic period. The pandemic, therefore, introduced a novel economic dynamic, one that various world economies were evidently not ready for. The result of the study calls for a holistic and adaptive monetary policy in periods that engender major economic uncertainties, such as global pandemics. The study shall add to the discourse regarding the limitation of monetary policy during pandemics. It shall provide suggestions that seek to enhance economic resilience and provide pertinent information that could potentially be incorporated into designing strategies that minimize the economic impact of pandemics in the future. Keywords: Pandemic, GDP, Economic Stability, Monetary Policy, COVID 19, Intervention, Economic Growth.