Wall Street Journal Article Opinion In the world today, I believe that countries have different ways of coping with devastating financial situations. By undertaking thorough research, I have gained sufficient experience when studying different policy measures that countries adopt to cope with their deteriorating performance. In this case, I have realized that they implement diverse fiscal and monetary policies, which help them to improve their economic performance and boost their competitiveness in the global market. In the event of an economic crisis, for instance, I have noted that some countries implement different measures to recover from the situation.
Some succeed in the recovery processes while others fail. This disparity has forced me to question why countries follow different approaches while implementing strategies to recover from recessions or other turbulent financial situations. In this paper, I will evaluate reasons why some major economies succeeded in recovering from the recent economic recession while others failed. A Research by the Wall Street Journal has recently shown that both the U. K. and the U. S. are implementing sufficient measures to allow them cope with the devastating effects of the recession.
On the contrary, Japan and the Eurozone have failed to implement appropriate measures to help them cope with the situation. For instance, during the recent global financial crisis witnessed between 2008 and 2009, the rates of unemployment peaked at 8.5 percent in the U. K and 10 percent in the U. S. (Hilsenrath). In the recent months, however, the rates of unemployment have gone down to 6 percent in the U. K. and 5.8 percent in the U. S. In the Eurozone, the rate of unemployment has risen to 11.5 percent while is headed back to a recession (Hilsenrath).
This means that there is a great disparity between the ways in which countries implement policies to recover from a financial crisis. In this case, I question why Japan and the Eurozone have failed to succeed in coping with the recession while the U. S. and the U. K. have emerged successful. According to Hilsenrath, the British and American central banks succeeded in combating the aftermaths of the recession because they adopted forceful easy-money strategies. On the contrary, Japan increased consumption tax to help it contain budget deficits whereas Eurozone focused on eliminating bank weaknesses and fiscal strictness.
In this perspective, I believe that that the Eurozone and Japan should emulate the strategies that the U. S. and the U. K implemented to succeed in addressing the after-effects of the recession. The U. S. and the U. K have been successful in addressing the aftermaths of the recent economic recession. They have addressed the well-established economic puzzle effectively. In this case, countries have raised questions regarding the measures that their central banks should implement in case their short-term interest rates go down.
In this situation, I suggest that their central banks should refrain from cutting short-term interest rates when the economy is weak. This is because they help to motivate borrowing, investment, and spending. Furthermore, countries should devise ways of improving the performance of their fiscal house to respond to disastrous situations effectively. Here, I believe it is the government’s role to improve fiscal balances’ structure in promising economic times to strengthen the performance of the economy. Moreover, it should offer incentives during a recession and eject capital to banks rather than letting them collapse.
By following this process, I believe that countries such as Japan and the Eurozone will be effective in addressing the repercussions of the recession. Works Cited Hilsenrath, Jon. "What Big Economies Got Right, or Wrong, After Crisis. " Wall Street Journal, 2014. web. 25 Nov 2014..