Correction of monetary policy under the influence of corona crisis and long-term factors

The article shows the modification of monetary policy and modification of its interaction with fiscal policy in response to the challenges of the global financial crisis and the corona crisis, as well as reveals potential macroeconomic policy adjustments in response to long-term structural changes in the global economy. The specificity of the global financial and economic crisis, which was caused by financial intermediaries, and the belief in markets efficiency led to the dominance of monetary instruments in combating this crisis. However, purely monetary stimulus does not solve structural problems, and, acting with a very low degree of targeting, but on a huge scale, leads to the debt accumulation and financial crises. The corona crisis forced to resort to budget incentives to ensure targeted support for people and businesses and provided an impetus to discuss the ways to make better use of fiscal policy capacity to increase potential GDP and reduce inequality. The following potential long-term adjustments of macroeconomic policy are revealed: 1) increasing the emphasis on the interests of employees; 2) increasing the inclusiveness of monetary and fiscal policy; 3) the growing role of fiscal policy as an instrument of macroeconomic stabilization; 4) revision of the theory of monetary and fiscal policy interaction; 5) revision of the pre-emptive approach to anti-inflation policy, which means the reaction of monetary policy to deviations of the inflation forecast from the target, and the emergence of alternatives: response to the actual achievement and maintenance the inflation target for some time and compensation for the previous deviations from the inflation target; 6) modification of the optimal anti-inflationary policy in response to demand-pull inflation and cost-push inflation; 7) adjustment of the monetary policy in response to rising inflation due to the exhaustion of long-standing global disinflationary forces that have been in effect since the 1980s; 8) more active monetary and fiscal stimulus in emerging market economies.