A refrigerant cycle is provided with an economizer circuit. The amount of refrigerant passing through the economizer circuit can be gradually modulated by an expansion device whose position can be easily adjusted from fully open to fully closed or disengaged. In the past, economizer circuits have either been fully engaged or fully disengaged. Modulation of economizer flow allows for variable capacity operation. This improves unit operating efficiency, minimizes unit cycling and prevents compressor overloading at extreme of operating conditions. It also allows for head pressure and discharge temperature control.