contractionary

Definition

Relating to or causing a decrease in the size or volume of something, specifically describing a monetary policy designed to reduce the money supply and curb inflation.

Etymology

Derived from the Latin 'contractio,' meaning 'to draw together' or 'to shrink.' It entered English as a noun, eventually evolving into the adjective form to describe economic policies that tighten financial conditions.

In the news

The article describes a contractionary monetary policy implemented to combat runaway inflation, which has inadvertently contributed to an investment drought by raising borrowing costs for businesses.

Investment hopes rise, but hurdles remain

Daily Sun

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