The Role of Monetary Policy in Global Financial Crisis

Abstract

The author of this article conduct an in-depth analysis of several major economic crises from the beginning of 1929 to the present and how the Federal Reserve used monetary policy and discourse to regulate the market during these crises. And how these policies affect the market, and how this makes the U.S. economy prosper. The article will first review the Great Depression of 1929 and explore how the U.S. economy evolved into a financial crisis that year, why the banking industry went bankrupt on a large scale, how these events affected people's lives and the Federal Reserve's response strategy. The author will then analyze the inflation rate, unemployment rate, and spiral inflation during the stagflation period from the 1970s to the 1980s, as well as the Federal Reserve's response measures. The article will also explore the impact of the 2008 financial crisis on financial markets, the real estate market, and ordinary people's lives, as well as the Federal Reserve's response. Finally, the article focuses on the COVID-19 crisis and the rise in inflation it has caused, assessing its impact on the U.S. economy, financial markets, and the Federal Reserve's policy measures. By analyzing these historical events, this article will explore the role of monetary policy, as well as the challenges and strategies of policymakers, providing perspectives for understanding history and predicting future economic challenges.