Fiscal Policies to Combat Recessions

Most of the countries depend on the resources and facilities from other neighboring countries. But this downfall has stopped exchange among the continents. The recession has created an impact on the banking sector, financial institutions and other credit-related industries. The recession has occurred in the past also but was not so severe as the present recession.
The financial crisis started in America and then prevailed to the other countries. This, in turn, affected the development in all the countries. Though the previous recessions have incurred loss and lead to unemployment, this time it has been more than the previous recession. There is a dramatic increase in the unemployment rate and this has lead to an increase in debts. Financial stability has gone down which left many companies at a sad state. Financial policies should suit the current recession and must help in improving the financial crisis. Government has taken measures to improve the financial situation. (Nigam 2009). As the financial industries were the worst hit by the recession, the companies which were depending on those financial services went down immediately. Economic depression has been prevailing from the downfall and it is still in the improved state. Although most of the financial concerns tried to overcome the
During this recession, many new policies and strategies were introduced by the government to improve the situation of the industries as well as the economy. Established concerns and the ones with a better financial background only survive the recession. Other small and financially not so strong companies had to wind up their business. (Burgan 2002). As they could not bear the recession and its effects, many people were pushed out of their job.
Out of the various policies, only some could help in improving the current situation. One among them is Keynesian policy, which mainly concentrated on economic status. Keynes introduced a system which had a simple and basic strategy.