Summary of the article
The financial crisis of 2007/2008 resulted in governments instituting measures to address the problems. The policy changes ranged from bailing some institutions to lowering interest rates (Ivashina & Scharfstein, 2010). The world economy has started to stabilize, but it has become a burden to get to crisis management mode and also to lift the growth (Talley, 2015). Countries across the world face different economic issues including a deeper slowdown in China, Greece economic challenges, India economic growth, unemployment, low inflation rates, contracting of economies. In addition, other challenges include lack of structural overhauls, benefits of falling oil prices, and diverging interest-rate policies. Furthermore, the entire processes are shrouded in internal politics in which it is difficult to pass legislations to address some of the concerns (Talley, 2015). The discussion was based on a meeting that was attended by numerous economists, societies, central bank leaders from different countries, and IMF. The aim of the meeting was to bring together different stakeholders in proposing the appropriate fiscal policies to normalize the economic activity and revert it from the emergency mode.
The societal and/or civic issues impacted by the fiscal policy
The interest rates and the current policies contribute to the poor economic position resulting in employment, and future meltdown would mean more people would suffer (Talley, 2015). Unstable economies mean that the society will not have disposable income, which is important in sustaining the lifestyle of the community. If corrective measures are not undertaken, the world economic will revert to the financial crisis period. The different governments across the world will be forced to support numerous industries, and it will be a burden to the taxpayers (Ivashina & Scharfstein, 2010). The decisions arrived at during the policy discussion will benefit the world in general. Failure to institute measures also affects the world in general because economic and financial activities are interconnected because of financial and monetary systems (Talley, 2015). The policy will not disadvantage any institution or stakeholder rather it will advance the requirements of the public. The societies and communities will benefit when the policy is implemented since the financial and economic crisis would have been managed. The world economies can be viewed from three perspectives: developed, developing and third world economies (Ivashina & Scharfstein, 2010). The developed economies are believed to be the ones who started the economic crisis and instituting measures at their levels ensure the problem is solved. Hence, the efficiency is premised on the decisions that the stakeholders have to undertake. The world is made of different cultures, but all the cultures understand the importance of economic development. The policy will advance the requirements of economic sustainability (Talley, 2015). For example, the policy reviews the Ukraine-Russia issues, the slowdown in China, economic stability in India, and, therefore, reviews different cultures with the purpose of sustaining the economy. The different institutions across the world are the benevolent dictator. The central banks involved determine the policy changes based on the political wing of the government. Therefore, the government remains the benevolent dictator (Ivashina & Scharfstein, 2010).
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The global implications of the event/proposal
The economic proposal is important in sustaining and supporting the economic (Erkens, Hung, & Matos, 2012). When some sections of the economic world are affected, the economic issue reverberates across the economies (Talley, 2015). For example, the economic crisis began in America but it affected many countries across the world. This illustrates the interconnected nature of world economies and addressing the problem ensures the economic stability or prosperity of the citizens and societies involved (Talley, 2015).
- Erkens, D. H., Hung, M., & Matos, P. (2012). Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide. Journal of Corporate Finance, 18(2), 389-411.
- Ivashina, V., & Scharfstein, D. (2010). Bank lending during the financial crisis of 2008. Journal of Financial economics, 97(3), 319-338.
- Talley, I. (A9 April, 2015). Lagging growth plagues economic policy makers. The Wall Street Journal. Retrieved from http://www.wsj.com/
