Tapering

Tapering is an economic term used to describe the gradual reduction of a central bank’s bond-buying program. It is a process of reducing the amount of money that a central bank injects into the economy by buying government bonds. This process is used to reduce the amount of money in circulation and to control inflation. Tapering is also used to reduce the amount of money that a central bank has to borrow from other countries in order to finance its operations. Tapering is a tool used by central banks to manage the money supply and to control inflation.

History of Tapering

Tapering has been used by central banks since the early 20th century. The first instance of tapering was in the United States in the 1920s, when the Federal Reserve began to reduce the amount of money it was printing. This was done in order to reduce the amount of money in circulation and to control inflation. Tapering has also been used by other central banks around the world, including the Bank of England, the European Central Bank, and the Bank of Japan.

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Summary

Tapering is a tool used by central banks to manage the money supply and to control inflation. It is a process of reducing the amount of money that a central bank injects into the economy by buying government bonds. Tapering has been used by central banks since the early 20th century and is used to reduce the amount of money in circulation and to control inflation. For more information about tapering, you can visit the websites of the Federal Reserve, the Bank of England, the European Central Bank, and the Bank of Japan.

See Also

• Quantitative Easing
• Monetary Policy
• Interest Rates
• Inflation
• Deflation
• Bond Yields
• Currency Exchange Rates
• Central Bank Balance Sheet
• Money Supply
• Monetary Expansion

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