Makers in America and globally assisted to stabilize financial world markets, which later checked on the weakening of real economy with deflationary pressure emergence.Though it is probable that worse results had been stopped, the destruction to the economy was already severe. The rate of unemployment in the U.S rose from 6% in 2008 to 9% by 2009 as inflation decreased sharply. With the increase of the crisis, and rate of federal funds on the lower bound, the committee resorted to non-traditional boundaries approaches to counter the crisis. When the committee returned on its path, there were guidelines some academic work and general principles but with a vital exception of Japanese case historical experience. Consequently, United States central bankers and the ones in developed countries facing same problems have learnt by acting. The economy therefore, has learnt to use balance sheet of Federal Reserve and communication tool.The monetary policies that have been reviewed in this paper, both nontraditional and traditional gave vital support to the recovery of U.S economy while assisting to keep the price stability. By July, the rate of unemployment had dropped to 8.3% from its recurring top of 10% and payrolls rose by four million jobs. And in spite of periodic worries about deflationary risk and besides, warned over and over again that more policy accommodation will trigger inflation and in turn inflation has been near 2% of the committees objective and expectation of inflation have maintained stability. The key sectors of the economy such as international trade, housing, company investment in assets, manufacturing and conditions in credit and financial markets have been made better. Nonetheless without standing these good signs, the situation of the economy is not near satisfaction. The rate of unemployment remains at more than 2% points beyond what most committee participants view as its long term normal value, with other signs like participation rate of labor force and count of individuals not working full time for economic purposes- confirms that the use of labor force remains at low levels. Moreover, the improvement rate in the market of labor has been slow. It has been noted that on other events that unemployment decline as viewed would probably continue if only economic growth rose above its long term trend rate. In fact, recent quarters growth has been warm, and therefore, not astonishingly, there have not been any net boost in the rate
Working Mother. October, 2003.190 pages, Vol. 26, No. 8ISSN 0278-193X
Published by Working Mother Media
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