Dove

What Is a Dove?
A dove is a monetary policymaker or advisor who prioritizes economic growth and employment over strict inflation control. Doves favor expansionary monetary policies—typically lower interest rates and sometimes quantitative easing—to boost borrowing, spending, and job creation.

Key Takeaways
* Doves emphasize low interest rates to support employment and economic growth.
* Critics warn that prolonged dovish policy can overheat the economy and raise inflation.
* The opposite stance is a hawk, who prioritizes controlling inflation through higher interest rates.
* Effective policy often requires flexibility—moving between dovish and hawkish stances as conditions change.

How Doves Influence the Economy
Dovish policies lower borrowing costs, encouraging households and businesses to take mortgages, loans, and lines of credit. Increased borrowing tends to raise consumer spending and investment, which can:
* Support job creation and reduce unemployment.
* Raise aggregate demand, putting upward pressure on wages and prices.
* Expand money and credit supply, which can depreciate the currency and increase import costs.

If sustained too long, these forces can lead to higher inflation. Doves typically view moderate inflation as an acceptable trade-off for lower unemployment and stronger growth, at least in the short term.

Examples and Historical Context
Dove is used to describe central bankers, policymakers, journalists, or politicians who advocate for looser monetary conditions. Notable examples include past Federal Reserve chairs known for prioritizing accommodative policies. Policymakers can shift over time—responding to crises or changing economic dynamics—so individuals may be described as hawkish at one time and dovish at another.

Hawk vs. Dove: The Policy Trade-off
* Doves: Favor expansionary monetary policy (low rates, quantitative easing) to stimulate growth and employment.
* Hawks: Favor contractionary monetary policy (higher rates, limited easing) to contain inflation.

Both perspectives address real risks—unemployment and inflation—and the balance between them depends on current economic conditions.

Types of Monetary Policy
* Expansionary monetary policy: Lowers interest rates and increases money/credit supply to stimulate a slow or recessionary economy.
* Contractionary monetary policy: Raises interest rates and reduces money/credit growth to cool an overheating economy and control inflation.

FAQs
Q: What is the hawk-and-dove theory?
A: It categorizes policymakers by whether they prioritize inflation control (hawks) or employment/growth (doves), guiding their preferred monetary tools and interest-rate stance.

Q: Do these terms apply outside monetary policy?
A: Yes. In politics, “hawks” and “doves” also describe preferences in foreign policy—hawks favor stronger military posture, doves favor restraint.

Bottom Line
A dove supports accommodative monetary policy to spur demand and lower unemployment, accepting some inflation risk. Hawks prioritize price stability and may tighten policy to curb inflation. Practical policymaking requires adaptability: raising rates to cool inflation when necessary and lowering them to support growth during downturns.