An examination of the effect of monetary expansion policies implemented by four large central banks after the 2008 global financial crisis and the COVID-19 crisis on developing countries on the example of Turkey

Abstract

After 1980, financial markets took a share due to globalization trends in the world. In literature, many studies exist which show us that the financial crisis and financial globalizations started to appear more often than it did in the past. The market’s mood is reflected in the data when risks and incalculability increase in financial markets. Financial liberalization and the removal or significant reduction of inspections have increased the fragility of markets. A number of decisions were made and interfered with by many authorities after the financial crisis which was felt all around the world for a long time. Before the 2008 economic crisis price stability was a focus for central banks. However, the importance of financial stability came into prominence after the crisis. The negative effects of Covid-19 crisis, which was not originated from economic reasons at the same time, which created a supply and demand shock, were seen fast. Like in every crisis politicians interfered in order to reduce the effects of the crisis. The connection between the 2008 global financial crisis and Covid-19 crisis is the need to increase declining total demand. By the reason of reduced economic activity on a global scale, monetary and fiscal policies and inventions that increase economic activity have been involved. The concept of globalizations has multifaceted effects on developing countries. By the entering of funds into enhanced market economies, it helps developing countries to meet the need for financing that will provide economic growth and development, while reducing production and increasing dependence on external financing. With financial globalization direction and momentum of the movement of fund is changing according to countries’ macroeconomic appearance. Particularly development and decisions taken in countries like the United States and England, which have the right comment on world trade, have influenced all around the world. The policies implemented by these countries in times of crisis are closely followed by economic actors. In this study FED (Federal Reserve Bank), ECB (European Central Bank), BOJ (Bank of Japan), BOE (Bank of England), monetary easing policies implemented by central bank after the global crisis in 2008 and the Covid-19 crisis were examined and how developing countries are affected by these crisis and policies are discussed and the example of Turkey was examined.