Sentences with phrase «contractionary when»

But it is extremely important to understand: it is the inflation - adjusted risk - free interest rate in an economy — the real interest rate that is neither stimulative nor contractionary when an economy is operating at full capacity without cyclical forces at play, thus balancing desired savings and investment.

Not exact matches

The ability of the central bank to buy a bond directly from the govt would avoid any contractionary effects while the new money used to pay claims clearly increases the money supply which may help during downturns (when this helicoptering mechanism should be considered for use to some degree).

It is apparent that the stance of monetary policy in place through the past couple of years has assisted the economy through the period when the contractionary forces have been at their most intense.

As a result, fiscal policy became contractionary just when it needed to be expansionary.

The risk presented by these developments is that, the longer they go on, the larger will be the contractionary effect on the economy when they inevitably turn.

Rates tend to fall when the Federal Reserve pursues expansionary monetary policy and contract when it pursues contractionary monetary policy.

The Fed enacts a contractionary monetary policy when the FOMC looks to increase the federal funds rate and slow the economy.