What is a implementation lag?
Implementation lag is a delay between the occurrence of a shift in macroeconomic conditions or an economic shock and the time that an economic policy response can be implemented and actually have an effect.
What are the 3 lags of fiscal policy?
There are three types of lag in economic policy: the recognition lag, the decision lag, and the effect lag. The recognition lag is the time it takes for the authorities to discover the need to make a change in economic policy.
How would economists define implementation lag?
Implementation lag is the gap between an adverse macroeconomic occurrence and the response by government and central bank through implementing a corrective fiscal or monetary policy.
What is an example of recognition lag?
For example, if global oil prices rise sharply, it will take some time before the cost of this is passed on to consumers and businesses throughout the economy and for any resulting economic damage to occur.
How long is implementation lag?
The nine months between the macroeconomic shock and the corrective action is an implementation lag.
How would economists define implementation lag quizlet?
implementation lag. Once the government passes a bill to help improve the economy during a recession it takes some time to disperse the funds to the appropriate agencies to implement the programs. Economists call the time it takes to start the projects the implementation lag.
How would Economists define implementation lag quizlet?
Why are the lags on implementing fiscal and monetary policy so different?
There is much less of a time lag for monetary policy than fiscal policy. Monetary policy decisions can be implemented much faster than fiscal policies because the central bank is not a government bureaucracy and the tools they use are more efficient than the tools of fiscal policy.
What are the four policy lags?
Identify the four main types of policy lags, recognition, implementation, decision, and effectiveness.
Which lags do automatic stabilizers affect?
Automatic stabilizers are government programs that automatically implement fiscal policy in response to economic conditions. It affects recognition and implementation lags.
How would economists define legislative lag?
Economists refer to the time it takes to pass a bill as the legislative lag. Similarly, the time necessary for the central bank to determine the appropriate policy response is called the decision lag.
What is a delay in implementing monetary policy called quizlet?
Inside Lags. Delay in implementing monetary policy. Outside Lags. The time it takes for monetary policy to have an effect.