Discover how contractionary fiscal policies encourage private investments by freeing credit markets and reducing borrowing costs, creating a crowding-in effect.

Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a nation's economic activity. Monetary policy is primarily concerned with the management of interest ...

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Fiscal policy uses government spending and taxes to influence the economy.

Monetary policy seeks to control the economy by manipulating the money supply and interest rates. Fiscal policy is designed to achieve the same end using targeted taxes and spending. The Achilles' ...