Fixed-Rule Policy

AAA

DEFINITION of 'Fixed-Rule Policy'

A fiscal or monetary policy designed to be an economic goal or target of a government. A fixed-rule policy, by definition, is pursued no matter the condition of the economy, and is considered independent of the current economic state.

INVESTOPEDIA EXPLAINS 'Fixed-Rule Policy'

For example, a fixed-rule policy of any government could be that the maximum target level of inflation must be less then 5% for any given year, as measured by the consumer price index (CPI). By creating a fixed-rule policy, a government can focus on longer term goals for an economy, and provide economic direction.

RELATED TERMS
  1. Fiscal Policy

    Government spending policies that influence macroeconomic conditions. ...
  2. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  3. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  4. Feedback-Rule Policy

    An economic policy that is triggered when a certain economic ...
  5. Economics

    A social science that studies how individuals, governments, firms ...
  6. Economy

    The large set of inter-related economic production and consumption ...
Related Articles
  1. What Is Fiscal Policy?
    Economics

    What Is Fiscal Policy?

  2. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  3. The Importance Of Inflation And GDP
    Economics

    The Importance Of Inflation And GDP

  4. Main Characteristics of Capitalist Economies
    Economics

    Main Characteristics of Capitalist Economies

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center