Contractionary policy is a macroeconomic tool used by a country's central bank or finance ministry to slow down an economy. ... Distortions include high inflation from an expanding money supply, ...

In 1994, the Fed, under Chairman Alan Greenspan, shifted from a neutral monetary stance to a contractionary policy, selling bonds to reduce the money supply and raising interest rates.

The long and short of it is that hiking interest rates will not solve the thorn in our flesh called inflation anytime soon.

Monetary policy is the tool used by central banks to influence the money supply, and with it, the economy at large. Browse Investopedia’s expert-written library to learn more.

We study the role of regional housing markets in the transmission of US monetary policy. Using a FAVAR model over 1999q1–2019q4, we find sizeable heterogeneity in the responses of US states to a ...

Monetary policy is the bedrock of any nation’s economic policy, and everyone from part-time workers to huge financial institutions, both foreign and domestic, are impacted as it shifts. Here’s ...

In an article published in The Journal of Macroeconomics[1] I show how information frictions could lead to asymmetric business cycles both in terms of magnitude and of the length of the return to ...

New Zealand central bank governor Adrian Orr said monetary policy is now contractionary after yesterday’s record interest-rate hike. “We can all put our hands on our hearts across the ...