tight money

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Tight money

When a restricted money supply makes credit difficult to secure. The antithesis of tight money is easy money.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Tight Money

A situation in which it is difficult to receive credit because of the monetary policy of the central bank. Tight money occurs when the central bank has enacted relatively high target interest rates. While this usually happens when the central bank is seeking to control or is concerned about inflation, tight money can negatively impact security prices and make it hard to receive a loan for a house or business.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

tight money

A condition of the money supply in which credit is restricted and interest rates, consequently, are relatively high. Tight money generally has a negative effect on security prices, at least in the short run. Compare easy money.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

tight money

or

dear money

a government policy whereby the CENTRAL BANK is authorized to sell government BONDS on the open market to facilitate a decrease in t he MONEY SUPPLY (see MONETARY POLICY).

The decrease in money supply serves to increase INTEREST RATES, which discourages INVESTMENT because previously profitable investments become unprofitable owing to the increased cost of borrowing (see MARGINAL EFFICIENCY OF CAPITAL

INVESTMENT).

Tight money policy, through MONEY SUPPLY/SPENDING LINKAGES, reduces AGGREGATE DEMAND. Contrast CHEAP MONEY.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
About 8.5% of banks reported tightened standards on credit cards, while on net 3.5% said they tightened standards for car loans and 9.3% said they tightened standards on other consumer loans.
An overly tightened screw is also going to be weaker under recoil.
Once reserved for only the most coveted trophy buildings in the city, building prices that fetch prices above a billion dollars have become increasingly common as the Manhattan rental market has tightened. Among the year's biggest deals was Jamestown's sale of 1271 Avenue of the Americas to Beacon Capital for $1.6 billion and Boston Properties' sale of 5 Times Square to AVR Properties for $1.28 billion.
This most recent tightening occurred in late November, and was the eighth time this year that the bank tightened rates.
Britain has tightened security for transatlantic flights in response to heightened fears of terrorism in the United States, and will put sky marshals on the flights when necessary, the government said.
As a result, the global wheat stocks-to-use ratio has tightened to near 30-year lows.
When the threads warmed, they tightened. Toxicity studies done so far have not revealed any problems, the scientists report.
Professor Christen Sorensen, a member of the advisory committee on the Greenlandic economy, has said that the finance policy has to be tightened - either through higher taxes or reduced spending.
"I think they tightened up too much last year," Enron CEO Ken Lay told me at a Washington, D.C., meeting of the Club for Growth, a market-oriented PAC.
Boeing has apparently discovered that the tail bolts on some Boeing 767 aircraft may have been inadequately tightened during the manufacturing process and is considering issuing a service bulletin recommending that operators check and replace any improperly tightened fasteners.
Only 7 percent of respondents said that credit had tightened since the first half of the year.