What is ‘Dear Money’
A situation in which money or loans are very difficult to obtain in a given country. If you do have the opportunity to secure a loan, then interest rates are usually extremely high. Also known as “tight money”.
Explaining ‘Dear Money’
This situation can be a result of a restricted money supply, causing interest rates to be pushed up due to the forces of supply and demand. Businesses may have a tough time raising capital during a period of dear money.
Further Reading
- " A Dear Money Man"?: Keynes on Monetary Policy, 1920 – www.jstor.org [PDF]
- Financial Sector Reforms: An Exercise in Introspection – www.jstor.org [PDF]
- Dear Money Policy, Rising Yields and High Interest Costs – www.jstor.org [PDF]
