Accommodating policy
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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.
Definition
According to Principles of Economics by Timothy Taylor (3rd 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.
