Expansionary monetary policy in such an environment might fail.

Additionally, raising interest rates would be a form of expansionary fiscal policy.

Its fiscal policy has been expansionary, but nowhere near the level of the US.

Expansionary monetary policy is expected to inject liquidity into the Japanese economy until inflation hits the Bank of Japan s 2 target, while expansionary fiscal policy is expected to continue until economic recovery takes hold.

Moreover, Brazilian fiscal policy is likely to switch from restrictive to neutral or slightly expansionary this year.

As a result of a recklessly expansionary American policy, they argued, they were being flooded with imported finance.

At this point, policy becomes expansionary again, and the cycle begins anew led by investment growth, the economy rebounds.

That policy, almost instantly dubbed Abenomics, comprises what have been called the three arrows bold monetary policy, an expansionary fiscal stance, and structural reforms to stimulate private investment.

These economic adjustments could occur much more smoothly if the eurozone as a whole were to pursue a more expansionary policy.

It could agree to swift bank recapitalization, a banking license for the European Stability Mechanism, and a more expansionary ECB policy.

The early 2012 upturn in US economic activity still owes a lot to extraordinarily expansionary monetary policy and unsustainable fiscal deficits.

The problem comes when expansionary monetary policy via standard open market operations and central bank guarantees of orderly markets prove insufficient.

The economy is weak, but the Bank of Japan (BOJ) cannot make monetary policy much more expansionary than it already is.

Of course, no real world policy falls cleanly into any one of these ideal types. Right now, the European Central Bank worries that continued expansionary fiscal policy will backfire.

With the government still having room to wield expansionary monetary and or fiscal policy, the economic revival was only a matter of time.

Even if this does not trigger a crisis, it sharply narrows the government s scope for using expansionary fiscal policy to stimulate the economy.

LONDON Over the last decade, America s expansionary monetary policy and China s rapid growth have been the two key drivers of global financial flows.

Experts have always underestimated the expansionary character of American foreign policy, because they think of expansion in old world terms conquest, imperialism, and colonialism.

This assertiveness has been on full display under Prime Minister Shinzo Abe, who has vowed to attack Japan s prolonged economic morass using three arrows expansionary monetary policy, aggressive fiscal policy, and structural reform.

In this view, cutting deficits will be expansionary.

That, plus the gloomy international outlook and a fiscal policy that will have to become less expansionary after the election, will slow the economy down.

So early fiscal consolidation can be expansionary on balance.

Today, as all major developed economies resort to expansionary monetary policy, the global economy is being flooded with excess liquidity, and a currency war is looming large.

BEIJING China s Central Economic Work Meeting, comprising top government decision makers, recently chose to continue the expansionary fiscal and monetary policy launched in the last quarter of 2008.

At the same time, emerging markets would gain the full benefits of expansionary monetary policy in the US, to the extent that it boosts demand for their exports.

Thus, expansionary monetary policy via standard open market operations by a central bank is the first item on the checklist of what to do in a financial crisis.

Though advanced country central banks have pursued expansionary monetary policy in the wake of the global economic crisis in an effort to boost demand, job creation has lagged.

The Chinese economy s performance has thus maintained the cyclical pattern familiar from the past two decades rapid investment growth, supported by expansionary policy, drives up the economic growth rate.

Europe is mired in its oxymoronic commitment to expansionary fiscal austerity.

Countries running surpluses must adopt expansionary policies and appreciate their currencies.

Both could be expansionary or not, depending on details and circumstances.

Unfortunately, its main impact at this point is to distract attention from measures that would truly stimulate growth, including an expansionary fiscal policy and financial sector reforms that boost lending.

After the global financial crisis erupted in the last quarter of 2008, interest rates in Brazil fell sharply, credit expanded quickly, and fiscal policy shifted from neutral to strongly expansionary.

In fact, the economy that has imbibed the strongest dose of expansionary policy has recovered less GDP per capita in the UK today is still 6 below the 2007 level.

In China, unlike in advanced countries, monetary and sterilization policy are often one in the same. The degree to which monetary policy is expansionary depends on the degree to which the liquidity created by currency market intervention has been sterilized.

Saudi Arabia produced a pro development expansionary government expenditure package for 2005.

In The General Theory of Employment, Interest, and Money, Keynes sought to provide the missing rationale for relying on expansionary fiscal policy to steer advanced capitalist economies out of the Great Depression.

Expansionary monetary policy has been successful, but only by pushing interest rates to historic lows and by convincing investors that borrowing costs will remain at their current levels for a long time.

Expansionary monetary policy in such an environment might fail. Perhaps for this reason, France s new president, François Hollande, favors using the government to direct specific outcomes for example, by hiring 60,000 new teachers.

Price based capital controls, as introduced in Colombia, Chile and, recently, Argentina, could help prevent exchange rate appreciation during surges of capital inflows and open policy options for expansionary economic policies during recession.

Moreover, the critics object, the evidence in support of expansionary fiscal consolidations is flawed.

Latin America s rapidly growing economies are particularly vulnerable, as they are forced to confront both China s exchange rate inflexibility and the impact of dollar devaluation arising from the US Federal Reserve s expansionary monetary policy.

Accelerating wage growth implies that the economy is now at a point at which increases in demand created by easier monetary policy or expansionary fiscal policy would not achieve a sustained rise in output and employment. Instead, this demand would be channeled into higher wages and prices.

One major source of instability is the looming reversal of the US Federal Reserve s expansionary monetary policy the prospect of which is generating volatility in global financial markets and threatening to disrupt emerging economy growth.

The New Keynesian models underpinning these policies assumed that an economy s true potential and thus the so called output gap that expansionary policy is supposed to fill to attain full employment can be precisely measured.