tight money

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Related to tightening: Monetary Tightening

Tight money

When a restricted money supply makes credit difficult to secure. The antithesis of tight money is easy money.

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.

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.

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.

References in classic literature ?
To this day I cannot utter or even write that name without a strange tightening of the breast and the gasp of mingled delight and dread of one's first passionate experience.
His arm is stealing round the waist again; it is tightening its clasp; he is bending his face nearer and nearer to the round cheek; his lips are meeting those pouting child-lips, and for a long moment time has vanished.
As the tightening of the padding and the pressing of the head to the board is gradual, the process is said not to be attended with much pain.
I," said Short-Rations, "I know all the fashions Of tightening a belt
She derived, however, great consolation, (during the tightening of the bowstring,) from the reflection that much of the history remained still untold, and that the petulance of her brute of a husband had reaped for him a most righteous reward, in depriving him of many inconceivable adventures.
he said, tightening his arms round her with fervid pressure.
She had plunged the breakfast dishes into a tin dish-pan and was bending above it with her slim arms bared to the elbow, the steam from the hot water beading her forehead and tightening her rough hair into little brown rings like the tendrils on the traveller's joy.
She stood up also, her lips tightening under a rapid frown.
As I extended my hand to search for the controlling button, that cruel and mocking laugh rang out once more, so close to me this time that I involuntarily shrank back, tightening my grip upon the hilt of my great sword.
For a time the Knight stood talking to those about him, but at last he arose and made ready to depart, so he called his men about him and, tightening the girths of his saddle, he mounted his horse once more.
When we had surmounted the acclivity, I was about to withdraw my arm from his, but by a slight tightening of the elbow was tacitly informed that such was not his will, and accordingly desisted.
Those on the hind feet he secured not only by tightening the draw strings but also rigged garters that fastened tightly around the legs above the hocks.