When this happens in the economy, we call it an effectiveness lag. Here's how economists describe it: effectiveness lag is the amount of time it takes for a fiscal or monetary policy's effects to produce the desired result. Even after a policy is implemented, it still takes time for it to work.
Consequently, what is the recognition lag?
Recognition lag is the time lag between when an actual economic shock, such as sudden boom or bust occurs, and when it is recognized by economists, central bankers and the government.
How do time lags affect monetary policy?
The time lag could span anywhere from nine months up to two years. Fiscal policy and its effects on output have a shorter time lag. When monetary policy attempts to stimulate the economy by lowering interest rates, it may take up to 18 months for evidence of any improvement in economic conditions to show up.
What is a time lag in ecology?
From Wikipedia, the free encyclopedia. In population ecology delayed density dependence describes a situation where population growth is controlled by negative feedback operating with a time lag.