Business terms and jargon explained. Your business dictionary
What is Constrained DiscretionA principle which applies to the situation in which policymakers have some freedom (discretion) to vary policy instruments, such as taxes or interest rates, but within well-defined limits (constraints). A well-designed policy framework gives policymakers sufficient freedom to respond flexibly to shocks and sufficient constraints to ensure that they do not exercise their discretion in a way that could undermine the long-term stability of the economy.
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Term created / updated 2007-03-20 22:41:59
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