3 Other issues being addressed in various forums are ways in which the pro-cyclicality of financial regulations could be reduced, how areas of regulatory arbitrage could be eliminated,  1  Lacker, J. Financial Conditions and the Economic Outlook. Remarks made at the South Carolina Business and Industry Political Education Committee, 13 January 2009. 2  Trichet, J-C.
Taken together, fiscal and monetary policy actions have so far supported a strong but incomplete recovery in demand and have—for now—substantially muted the normal recessionary dynamics that occur in a downturn. In a typical recession, there is a downward spiral in which layoffs lead to still lower demand, and subsequent additional layoffs.