Research In The International Financial Crisis And The Effects Of The Application Of Keynesian Policies

In August2008, the financial crisis derived from U.S. subprime mortgage crisis hasbroken out, the crisis spread rapidly from the virtual economy to the real economy, andalso spread rapidly from the U.S. to Europe and other Asian countries, leading to globaleconomies collective recession. In response to the global financial crisis, governmentshave adopted Keynesian macroeconomic policy adjustment, bailing out troubledinstitutions, the United States as the representative of some of the world’s majoreconomies adopted unconventional monetary policy measures–Quantitative EasingPolicy to rescue the economy and stimulate economic recovery. Since2010, the effectof the Zero Interest Rrate Policy and Quantitative Easing began to take effect, the maineconomic indicators of U.S., EU and Japan began to rise, the economic situation hasbeen improved, since then the United States and Japan have launched new quantitativeeasing policies in order to further stimulate economic growth. Although these policieswere able to prevent further deterioration of the financial crisis and stimulate economicrecovery, they may cause a series of problems such as inflation, distortion of resourcesallocation and so on. If not handled properly, these problems will become the source ofthe next round of global financial crisis. Therefore, how to ensure steady economicrecovery, eliminating the negative effect of bailout policies after financial crisis may bethe main task in the post-crisis era. This requires not only the efforts of individualcountries to narrow and eliminate the negative impacts, but also need other nationalcooperation to give the corresponding coordination. In addition, countries can cope withpossible future financial challenges by strengthening financial risk monitoringcapabilities, improving the international currency clearing system, reforming theinternational financial system and applying a number of other measures.