Updated: Aug 20, 2021

The policy combination of tight monetary policy to discourage inflation, and lax public finance to encourage real growth. This policy mix is named in recognition of its use in the United States during the presidency of Ronald Reagan (1911-2004). It led to large deficits in both the US government budget and the US balance of payments on current account.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.