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Outside Lag
In economics, the outside lag is the amount of time it takes for a government or central bank's actions, in the form of either monetary or fiscal policy, to have a noticeable effect on the economy. Its converse is the inside lag In economics, the inside lag (or inside recognition and decision lag) is the amount of time it takes for a government or a central bank to respond to a shock in the economy. It is the delay in implementation of a fiscal policy or monetary policy. ..., the amount of time it takes the policy authority to recognize that a situation calls for a policy response and to decide on that response and implement it. The outside lag can be a major problem, and must be taken into account in deciding what expansionary or contractionary policy actions to implement and, indeed, whether to implement any at all. Long lags Suppose, for example, that the main thrust of a policy action's effects on the economy is expected to be felt 20 months after the policy action is taken ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Central Bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base. Most central banks also have supervisory and regulatory powers to ensure the stability of member institutions, to prevent bank runs, and to discourage reckless or fraudulent behavior by member banks. Central banks in most developed nations are institutionally independent from political interference. Still, limited control by the executive and legislative bodies exists. Activities of central banks Functions of a central bank usually include: * Monetary policy: by setting the official interest rate and controlling the money supply; *Financial stability: acting as a government's banker and as the bankers' bank ("lender of last resort"); * Reserve management: managing a country's ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monetary Policy
Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate, to ensure price stability and general trust of the value and stability of the nation's currency. Monetary policy is a modification of the supply of money, i.e. "printing" more money, or decreasing the money supply by changing interest rates or removing excess reserves. This is in contrast to fiscal policy, which relies on taxation, government spending, and government borrowing as methods for a government to manage business cycle phenomena such as recessions. Further purposes of a monetary policy are usually to contribute to the stability of gross domestic product, to achieve and maintain low unemployment, and to maintain predictable exchange rates with other currencies. Monetary ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fiscal Policy
In economics and political science, fiscal policy is the use of government revenue collection (taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variables developed in reaction to the Great Depression of the 1930s, when the previous laissez-faire approach to economic management became unworkable. Fiscal policy is based on the theories of the British economist John Maynard Keynes, whose Keynesian economics theorised that government changes in the levels of taxation and government spending influence aggregate demand and the level of economic activity. Fiscal and monetary policy are the key strategies used by a country's government and central bank to advance its economic objectives. The combination of these policies enables these authorities to target inflation (which is considered "healthy" at the level in the range 2%–3%) and to increase employment. Additionally, it is designed to try to k ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inside Lag
In economics, the inside lag (or inside recognition and decision lag) is the amount of time it takes for a government or a central bank to respond to a shock in the economy. It is the delay in implementation of a fiscal policy or monetary policy. Its converse is the outside lag (the amount of time before an action by a government or a central bank affects an economy). The inside lag comprises the recognition lag (the time taken to recognize the shock) and the decision lag (the time taken to decide on and pursue a response). The inside lag is generally a more severe problem for fiscal policy (government spending and taxation policy) than for monetary policy. Monetary policy is conducted by a central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ... that is devoted substantial ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Law Of Unintended Consequences
In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences) are outcomes of a purposeful action that are not intended or foreseen. The term was popularised in the twentieth century by American sociologist Robert K. Merton and expanded by economist Thomas Sowell and psychologist Stuart Vyse.Robert K. Merton, Versatile Sociologist and Father of the Focus Group, Dies at 92 Michael T. Kaufman, '''' Unintended consequences can be grouped into three types: * ''Unexpected benefit'': ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Distributed Lag
In statistics and econometrics, a distributed lag model is a model for time series data in which a regression equation is used to predict current values of a dependent variable based on both the current values of an explanatory variable and the lagged (past period) values of this explanatory variable. The starting point for a distributed lag model is an assumed structure of the form :y_t = a + w_0x_t + w_1x_ + w_2x_ + ... + \text or the form :y_t = a + w_0x_t + w_1x_ + w_2x_ + ... + w_nx_ + \text, where ''y''''t'' is the value at time period ''t'' of the dependent variable ''y'', ''a'' is the intercept term to be estimated, and ''w''''i'' is called the lag weight (also to be estimated) placed on the value ''i'' periods previously of the explanatory variable ''x''. In the first equation, the dependent variable is assumed to be affected by values of the independent variable arbitrarily far in the past, so the number of lag weights is infinite and the model is called an ''infinite ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
