Why do economies go into recession, and what should policymakers do? How do governments use money to influence the economy?
Over the past century governments have used a variety of strategies to avoid economic instability, and the current economic crisis has been handled very differently from the Great Depression, the last comparable global downturn. Getting the balance right - between government spending and taxation, low inflation and low unemployment, low interest rates for borrowers and rewards for savers - is difficult in practice, and the subject of ongoing debate in economic theory.