Expansionary Monetary Policy
Expansionary monetary policy is a type of economic policy used by central banks to stimulate the economy. It involves increasing the money supply in the economy by lowering interest rates and increasing the availability of credit. Expansionary monetary policy is used to combat economic downturns, such as recessions, and to encourage economic growth.
History of Expansionary Monetary Policy
Expansionary monetary policy has been used since the early 20th century. It was first used by the Federal Reserve in the United States during the Great Depression of the 1930s. The Federal Reserve used expansionary monetary policy to increase the money supply and stimulate the economy. Since then, expansionary monetary policy has been used by central banks around the world to combat economic downturns and encourage economic growth.
Comparison of Expansionary Monetary Policy
| Policy | Interest Rates | Money Supply |
|---|---|---|
| Expansionary | Low | High |
| Contractionary | High | Low |
Summary
Expansionary monetary policy is a type of economic policy used by central banks to stimulate the economy. It involves increasing the money supply in the economy by lowering interest rates and increasing the availability of credit. Expansionary monetary policy is used to combat economic downturns, such as recessions, and to encourage economic growth. For more information about expansionary monetary policy, you can visit the websites of the Federal Reserve, the European Central Bank, and the Bank of England.
See Also
- Contractionary Monetary Policy
- Monetary Policy
- Interest Rates
- Money Supply
- Fiscal Policy
- Inflation
- Deflation
- Quantitative Easing
- Central Bank
- Economic Stimulus
