Time lags

Updated: Aug 20, 2021

The delay between an action and the event which is believed to have arise in several ways. First, there are lags in the collection, collation, and dissemination of economic data. Second, even when the data are available, economic decision-makers often defer action while they wait for more data, to try to assess whether changes are temporary or permanent, or because of disagreement about what the response should be. Third, even when decisions have been taken, it takes time to put them into effect: in some cases, for example opening a new factory in response to a rise in demand, this delay may be considerable.

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

Sources & references
Risk disclaimer
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.