between when a crisis
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.