What are the potential pitfalls of policy incoherence or conflicting objectives?

Monetary policy is often referred to as being either expansionary (stimulating economic activity and consequently employment and inflation) or contractionary ( ... Jan 16, 2015 ... Working Paper No. 521. By Benjamin Nelson, Gabor Pinter and Konstantinos Theodoridis ... To explain this 'waterbed' effect, we propose a standard ... contractionary monetary policy exerts an important reallocation effect by cleansing unproductive firms and enhancing aggregate productivity. At the same ... Mar 4, 2025 ... Bangladesh's central bank has decided to continue with a contractionary monetary policy for the January-June period, until the desired level of inflation is ... May 24, 2017 ... Summary. Using VAR models for the USA, we find that a contractionary monetary policy shock has a persistent negative impact on the level of ... Definition: A contractionary policy is a kind of policy which lays emphasis on reduction in the level of money supply for a lesser spending and investment ... Aug 17, 2022 ... “Contractionary monetary policy runs the risk of quietly worsening racial and gender gaps with or without a widespread recession.” Inflation on ... A contractionary policy is a monetary measure to reduce government spending or the rate of monetary expansion by a central bank. ... monetary policy. According to our results, a contractionary monetary policy shock generates long-run adverse effects on the level of real wages. While the ... Expansionary fiscal policy occurs when the Congress acts to cut tax rates or increase government spending, shifting the aggregate demand curve to the right.