Monetary and Fiscal Policy in the Times of Crisis: Case of Serbia

The adequate monetary and fiscal policies are of great importance for the effects mitigation of the global financial crisis. The reduction of interest rates and fiscal stimulus should prevent further deteriorations in the money and capital markets as well as in the economy. Decreases in key interest rates did not necessarily result in the fall of money market rates for the purpose of encouraging banks to provide additional finances to companies. Government spending aimed at citizens and industries resulted in fiscal imbalances and public debt escalation. Given the inter-dependencies between US and Europe as well as Europe and Serbia we analysed the monetary and fiscal policies that have been implemented in US, Europe and Serbia during the post-crises period of the global financial crisis.