Third, central banks in advanced countries extensively used credit and quantitative easing measures which led to large expansion of their balance sheets. Fourth, while in advanced economies fiscal support aimed at rescuing the financial sector from the crisis situation, in EMEs they were generally meant to address the deficiency in aggregate demand.
Indian experience Until the emergence of the global crisis, the Indian economy was passing through a phase of high growth driven by domestic demand – growing domestic investment financed mostly by domestic savings and sustained consumption demand. Inflation was also low and stable. Sequential financial sector reforms, rule-based fiscal policy and forward looking monetary policy together contributed to the improved macroeconomic performance.