Credit Where Due: A Debate

Abstract

This paper reviews earlier work in order to get a single point of consensus regarding current global crises, which overlap the economy of whole world. We find contradictory explanations for the current episode of crises where different methodologies had been adopted in scrutinizing the situation. Overall few put the blame on macroeconomic variables and little on financial vulnerabilities. Some suggest for monetary policy reevaluation and others for fiscal policy to fill in the gap. We find fiscal policy a superior instrument for scheming such circumstances. We propose that interest free financial system would be a better option as an alternative.

Keywords: Fiscal Policy, Monetary Policy, Credit Issues, Interest free solution.