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"But if the level goes much above 7 percent, then that would exercise a contractionary effect on the economy."
Eventually, a contractionary monetary policy of this form must work.
A contractionary fiscal policy would probably be necessary here.
Q. Yeah, but presumably, once that works its way through the system, it will no longer be a contractionary factor.
The substance of the matter is that today we need expansionary, rather than contractionary, economic policy.
But it also forced fiscal policy to remain contractionary at a time when the economy appears to be slowing.
Instead, we ended up delaying and taking contractionary steps at almost the precise moment when the economy stopped growing.
Conversely, contractionary monetary policy seeks to reduce the size of the money supply.
He stated that the Irish tax cuts made over the past three years have been contractionary, not inflationary.
Similarly, a contractionary change would shift the AD curve to the left.
The overall picture for both the money supply and private credit is as contractionary as in late 2008 after the Lehman crisis.
Characteristics of social market economies are a strong competition policy and a contractionary monetary policy.
Contractionary fiscal policy is the regrettable necessity imposed by the large Reagan deficits.
The idea that a country will cede its international competitiveness during a contractionary economy due to "green policy" is laughable.
It also appears highly contractionary - which is exactly the opposite of what is needed for an economy that looks to be slowing fast.
Yes, austerity for the sake of deleveraging is contractionary.
When fiscal policy is contractionary, expansionary monetary policy can help make up the difference.
In fact, Mr. Gordon argues that the initial impact may even be contractionary.
The results, they said, were contractionary policies that risked causing even more damage to the economies it was overseeing.
But most importantly, the European authorities have to reverse course and ditch the contractionary fiscal policies that are at the heart of the problem.
By contrast, contractionary policies would reap the benefits of lower inflation, but at the cost of higher unemployment.
Before the first New Deal measures people expected a contractionary economic situation (recession, deflation) to persist.
For example, the Bush administration could move quickly to aid distressed state governments, avoiding harsh (and contractionary) cuts in essential programs.
As the budget official said, "The Government in its contractionary state doesn't have a lot of capacity to provide that kind of stimulus."
On the other hand reduced injections will have a contractionary effect on income levels in the domestic circular flow.