inside lag

Popular Terms
The delay between when a crisis or problem becomes apparent in an economy and when financial institutions and/or government agencies respond with a policy designed to mitigate the problem. The inside lag time may be divided into 3 stages. The first stage is 'recognition', when sufficient evidence is available that the economy is in trouble. The second stage is 'decision' when various options are weighed and an appropriate policy crafted. The final stage is 'implementation' when the policy takes effect.


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