Authors: Carlos Carvalho, Stefano Eusepi, and Christian Grisse

The global recession of 2008-09 led to monetary and fiscal policy responses by central banks and government authorities that were often unconventional in size and scope. A study of expansionary measures employed during the recession suggests that overall, the policies were likely effective in shaping the outlook for a recovery, as forecasters raised their expectations of inflation and GDP growth after the policies’ implementation. From this perspective, the policies stimulated economic activity and prevented deflationary pressures during the financial crisis.