Difference between revisions of "Accommodating policy"
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| − | [[Accommodating policy]] | + | [[Accommodating policy]] is a policy that yields to the effect of a shock and thereby prevents the shock from being disruptive; for example, a policy that raises aggregate demand in response to an adverse supply shock, sustaining the effect of the shock on prices and keeping output at its natural level. |
==Definition== | ==Definition== | ||
Latest revision as of 15:43, 1 July 2020
Accommodating policy is a policy that yields to the effect of a shock and thereby prevents the shock from being disruptive; for example, a policy that raises aggregate demand in response to an adverse supply shock, sustaining the effect of the shock on prices and keeping output at its natural level.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Accommodating policy. A policy that yields to the effect of a shock and thereby prevents the shock from being disruptive; for example, a policy that raises aggregate demand in response to an adverse supply shock, sustaining the effect of the shock on prices and keeping output at its natural level.
