Global Monetary Responses to the 2008 Financial Crisis

Document Type

Article

Publication Date

4-9-2025

Abstract

This study examines the impact of the 2008 Global Financial Crisis on central bank interest rates across fourteen countries (C1 to C14), using data spanning from 1993 to 2022. Our analysis categorizes the timeline into three segments: pre-crisis (1993-2006), during the crisis (2007-2009), and post-crisis (2010-2022). Utilizing multivariate analysis techniques including Pillai’s Trace, Wilks’ Lambda, and Hotelling’s Trace, we assess the statistical significance of changes in interest rates over these periods. The results indicate a significant reduction in interest rates during the crisis, with this downward trend persisting into the post-crisis period. For instance, the Russian Federation (C10) saw a reduction from an average interest rate of 21.712% pre-crisis to 9.798% post-crisis, while Brazil (C11) observed a decrease from 65.052% to 35.982%. The study confirms that the 2008 crisis had a profound and lasting impact on global monetary policies, as central banks across the analyzed nations lowered rates significantly to counteract the recessionary effects and stimulate economic recovery. This comprehensive analysis provides insights into the dynamic responses of central banks during one of the most challenging periods in recent financial history.

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