Updated: Aug 20, 2021

In economics, an unexpected and unpredictable event that has a positive or a negative effect on the economy. A shock is said to be permanent if it has a long-run effect, for example, economic effects of major geographical discoveries or major technical developments; otherwise it is said to be transitory: for example, monetary or fiscal policy changes may have no long-run effect on real income. See also adverse supply shock.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.