A MULTI-DIMENSIONAL POLICY FRAMEWORK FOR ANALYZING AND RESPONDING TO GLOBAL ECONOMIC CRISES

Abstract

This paper builds a Holistic Evaluative Model (or HEM) to analyze crises responses, focusing on multiple narratives (explanations) from fields as varied as economics, political science, finance and public policy. A broader framework equips policymakers with more options to shape responses to crises which routinely occurred during the last 75 years of heightened globalization. A HEM reflects the actual process of policy evaluation by combining data across different fields with a valid approach clear enough to discuss increasing opportunities to ameliorate crisis impacts. Even if they are identified, policymakers may not directly influence the causes of crises, which for 2007-2009 included (a) limited market corrections; (b) regulation deficiencies (c) systemic risks; (d) irrational behaviors; (e) informational complexities and (f) cultural failings (that exacerbated these inefficiencies), but they can focus on developing and implementing adequate policy responses. As such, HEMs increase options over a siloed approach by incorporating multiple theoretical tools, dynamic ripple-effects and diverse stakeholders – simultaneously evaluating monetary-fiscal policy, actor rationality, systematic risk and the cultural context.