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The experience of the Carter era suggests the effect of credit restraint can be large.
Credit restraint will not help if it causes nominal GDP to slow disproportionately.
Hence, the very conditions that made credit restraint advisable also made it objectionable.
"If deleveraging of private debt follows the tracks of previous crises as well, credit restraint will damp employment and growth for some time to come," they wrote.
If the Fed should misjudge the needed credit restraint, others said, the economy could move quickly from too much growth to too little.
Today, credit restraint chiefly depends on how long it takes the private sector to respond to policy actions such as the Fed's commercial-paper purchases and the widespread recapitalisation of weakened banks.
Similar(53)
Thus, the general banking system is usually expected to bear the brunt of monetary and credit restraints when decisions are made to dampen inflationary pressures in the economy.
I am in the process of purchasing my first home, and because of credit restraints I had to have my mom as a co-signer.
Regulations to limit them, like credit restraints, would only interfere with the efficient workings of the markets.
An additional anchor space was originally built for B. Altman and Company, but it remained vacant, as the chain decided not to open the Walden Galleria store due to credit restraints.
Credit Votaw for restraint.
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