Economic Crises and Monetary Policies: A Theoretical Analysis of Effects on Inflation and Multisectoral Growth

Abstract

This article, based on a systematic and integrative review of the literature on economic crises, offers an in-depth analysis of the impacts of financial, health, and geopolitical shocks on inflation and multisectoral economic growth. By adopting a comparative, multidimensional, and multidisciplinary approach, it draws on lessons from the 2008 global financial crisis, the COVID-19 pandemic, and current geopolitical tensions including armed conflicts, disruptions to global supply chains, and economic sanctions. These events are examined in terms of their capacity to trigger feedback effects on key macroeconomic balances, particularly through market volatility, reduced investment, and fluctuations in international trade.

The article places particular emphasis on the effectiveness and limitations of unconventional monetary policies such as quantitative easing (QE), negative interest rates, and asset purchase programs implemented by central banks to mitigate the economic fallout. While these measures have, in some cases, supported aggregate demand, stabilized financial markets, and delayed recessions, their long-term effects raise persistent concerns: increasing social inequalities, speculative bubbles, unsustainable public and private debt, and excessive reliance on central bank interventions. The article thus highlights the structural weaknesses of these mechanisms and calls for a reform of economic policy frameworks, including ambitious structural reforms, strengthened financial regulation, and enhanced international cooperation to build a more resilient, equitable, and sustainable economy.

Classification JEL: E52, G01, N10

Paper type: Theoretical Research