Contractionary

Part of speech: adjective

Definitions

1. Causing or relating to a reduction in economic activity, leading to slower growth or a decrease in output
2. Characterized by policies or measures that decrease spending, investment, or money supply to slow economic expansion
3. Describing an approach or condition that aims to reduce inflation by limiting economic growth or demand

Etymology: "Contractionary" is a plain modern formation: the noun "contraction" (from Latin "contractio", a drawing together, which gave English the sense of shrinking or narrowing) plus the suffix "-ary". The suffix comes down through Middle English "-arie" from Latin "-arius", a common ending for adjectives meaning "relating to" or "connected with", as in "budgetary" or "military". Applied to the economy, the word describes policy or conditions that pull activity inward, shrinking spending, credit or output rather than expanding them. The idea comes from the same image as the noun: something drawn together and made smaller. The adjective therefore sits alongside its opposite, "expansionary", and the pair is built on the same pattern.

Synonyms: restrictive, tightening

Antonyms: expansive, growth-oriented