Contractionary Fiscal Policy

Definition: Contractionary fiscal policy is a government policy of reducing spending and raising taxes.

In the language of some first courses in macroneconomics, it shifts the IS curve (investment/saving curve) to the left.

Terms related to Contractionary Fiscal Policy:

• Contractionary Monetary Policy
• Lump Sum Tax
• National Debt

About.Com Resources on Contractionary Fiscal Policy:

• Fiscal Policy in the 1960s and 1970s
• Fiscal Policy and Economic Stabilization
• Introduction to Monetary and Fiscal Policy

Writing a Term Paper? Here are a few starting points for research on Contractionary Fiscal Policy:

Journal Articles on Contractionary Fiscal Policy:

• Fiscal Policy, Profits, and Investment
• Reassessing Discretionary Fiscal Policy
• Non-Keynesian Effects of Fiscal Policy Changes