The central bank then has a choice between implementing a contractionary monetary policy to fight inflation and an expansionary policy to fight recession.
However, the tight monetary policy wreaked havoc on the corporate sector, and by June 1980 it moved away to an expansionary policy stance.
Ireland had its knuckles rapped for following expansionary budget policies at a time of strong growth in February 2001.
Low interest rates and expansionary policies seem to have pushed the US economy forward and we are seeing very strong figures being reported there.
It was therefore ‘no longer prudent’ to continue with an expansionary policy stance.
If expansionary policies are not adopted, the economy may regress.
There is also the concern that, like Japan, the US may be pushing on a string with expansionary policies.
He pointed out that interest rates are still very low, fiscal policy is still very expansionary and the inventory situation almost everywhere is healthily low.
Monetary policy was quite expansionary during 1999, as the first of the two articles predicted, and tightened considerably in recent months as the later article suggested.
At present, monetary policy is expansionary , as interest rates are less than the rate of inflation.