How can central banks communicate effectively about these trade-offs and the rationale for their policy decisions?

Similarly, a monetary tightening only reduces inflation and output when accompanied by contractionary fiscal policy. These results are robust to several ... Oct 10, 2022 ... Inflation and Quantitative Tightening - A theoretical assessment of contractionary monetary policy and real economic activity ... contractionary policy in the recovery that has followed. If matters continue that way, fiscal policy may lose its utility as a means of sparking economic growth ... Oct 12, 2022 ... Contractionary fiscal policy: In contractionary fiscal policy, the government taxes more than it spends—either by increasing tax rates, ... Jan 19, 2023 ... Using a VAR model, Amarasekara (Citation2008) finds that contractionary monetary policy shock decreases output and inflation while causing the ... So, if the government takes expansionary fiscal policy action (shifting AD right) while the Federal Reserve engages in contractionary monetary policy (shifting ... Contractionary monetary policy is one of the two types of monetary policy and can be defined as actions taken by the central bank in order to close an ... Apr 1, 2025 ... Contractionary monetary policy has the opposite effect on GDP, employment, and inflation. The Fed chooses whether to make monetary policy ... ... contractionary monetary policy have two effects on households' labor supply decisions. On the one hand, when monetary policy tightens, there's a ... Monetary policy is often referred to as being either expansionary (stimulating economic activity and consequently employment and inflation) or contractionary ( ...