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Supply Shock
A supply shock is an event that suddenly increases or decreases the supply of a commodity or service, or of commodities and services in general. This sudden change affects the equilibrium price of the good or service or the economy's general price level. In the short run, an economy-wide negative supply shock will shift the aggregate supply curve leftward, decreasing the output and increasing the price level. For example, the imposition of an embargo on trade in oil would cause an adverse supply shock, since oil is a key factor of production for a wide variety of goods. A supply shock can cause stagflation due to a combination of rising prices and falling output. The 1973 Oil Crisis is often used as the exemplar case of a supply shock, when OPEC restrictions on production and sale of petroleum resulted in fuel shortages throughout the developed world. In the short run, an economy-wide positive supply shock will shift the aggregate supply curve rightward, increasing output and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Supply (economics)
In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or to an individual. Supply can be in produced goods, labour time, raw materials, or any other scarce or valuable object. Supply is often plotted graphically as a supply curve, with the price per unit on the vertical axis and quantity supplied as a function of price on the horizontal axis. This reversal of the usual position of the dependent variable and the independent variable is an unfortunate but standard convention. The supply curve can be either for an individual seller or for the market as a whole, adding up the quantity supplied by all sellers. The quantity supplied is for a particular time period (e.g., the tons of steel a firm would supply in a year), but the units and time are often omitted in theoretical presentations. In the goods market, supply is the amount of a product ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics Supply Shock
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Cycle
Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, government institutions, and private sector firms. There are many definitions of a business cycle. The simplest defines recessions as two consecutive quarters of negative GDP growth. More satisfactory classifications are provided by, first including more economic indicators and second by looking for more data patterns than the two quarter definition. In the United States, the National Bureau of Economic Research oversees a Business Cycle Dating Committee that defines a recession as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." Business cycles are usually thought of as medium-term ev ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Supply And Demand
In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris_paribus#Applications, holding all else equal, the unit price for a particular Good (economics), good or other traded item in a perfect competition, perfectly competitive market, will vary until it settles at the market clearing, market-clearing price, where the quantity demanded equals the quantity supplied such that an economic equilibrium is achieved for price and quantity transacted. The concept of supply and demand forms the theoretical basis of modern economics. In situations where a firm has market power, its decision on how much output to bring to market influences the market price, in violation of perfect competition. There, a more complicated model should be used; for example, an oligopoly or product differentiation, differentiated-product model. Likewise, where a buyer has market power, models such as monopsony will be more a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stagflation
Stagflation is the combination of high inflation, stagnant economic growth, and elevated unemployment. The term ''stagflation'', a portmanteau of "stagnation" and "inflation," was popularized, and probably coined, by British politician Iain Macleod in the 1960s, during a period of economic distress in the United Kingdom. It gained broader recognition in the 1970s after a series of global economic shocks, particularly the 1973 oil crisis, which disrupted supply chains and led to rising prices and slowing growth. Stagflation challenges traditional economic theories, which suggest that inflation and unemployment are inversely related, as depicted by the Phillips Curve. Stagflation presents a policy dilemma, as measures to curb inflation—such as tightening monetary policy—can exacerbate unemployment, while policies aimed at reducing unemployment may fuel inflation. In economic theory, there are two main explanations for stagflation: supply shocks, such as a sharp increa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Macroeconomics
Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (economics), output/Gross domestic product, GDP (gross domestic product) and national income, unemployment (including Unemployment#Measurement, unemployment rates), price index, price indices and inflation, Consumption (economics), consumption, saving, investment (macroeconomics), investment, Energy economics, energy, international trade, and international finance. Macroeconomics and microeconomics are the two most general fields in economics. The focus of macroeconomics is often on a country (or larger entities like the whole world) and how its markets interact to produce large-scale phenomena that economists refer to as aggregate variables. In microeconomics the focus of analysis is often a single market, such as whether changes in supply or ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Technology Shock
Technology shocks are sudden changes in technology that significantly affect economic, social, political or other outcomes. In economics, the term technology shock usually refers to events in a macroeconomic model, that change the production function. Usually this is modeled with an aggregate production function that has a scaling factor. Normally reference is made to positive (i.e., productivity enhancing) technological changes, though technology shocks can also be contractionary. The term “shock” connotes the fact that technological progress is not always gradual – there can be large-scale discontinuous changes that significantly alter production methods and outputs in an industry, or in the economy as a whole. Such a technology shock can occur in many different ways. For example, it may be the result of advances in science that enable new trajectories of innovation, or may result when an existing technological alternative improves to a point that it overtakes the domina ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Demand Shock
In economics, a demand shock is a sudden event that increases or decreases demand for goods or services temporarily. A positive demand shock increases aggregate demand (AD) and a negative demand shock decreases aggregate demand. Prices of goods and services are affected in both cases. When demand for goods or services increases, its price (or price levels) increases because of a shift in the demand curve to the right. When demand decreases, its price decreases because of a shift in the demand curve to the left. Demand shocks can originate from changes in things such as tax rates, money supply, and government spending. For example, taxpayers owe the government less money after a tax cut, thereby freeing up more money available for personal spending. When the taxpayers use the money to purchase goods and services, their prices go up. In the midst of a poor economic situation in the United Kingdom in November 2002, the Bank of England's deputy governor, Mervyn King, warned that t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commodity Price Shock
Commodity price shocks are times when the prices for commodities have drastically increased or decreased over a short span of time. Post-Napoleonic Irish grain price and land use shocks (1815–1816) During the international Post-Napoleonic Depression (1815–1821) following the conclusion of the French Revolutionary and Napoleonic Wars (1792–1815), wheat and other grain prices fell by half in Ireland, and alongside continued population growth, landlords converted cropland into rangeland by securing the passage of tenant farmer eviction legislation in 1816, which led, because of the Irish workforce's historic concentration in agriculture, to a greater subdivision of remaining land plots under tillage and increasingly less efficient and less profitable subsistence farms. 1971–1973 At the time of the 1973 oil crisis, the price of corn and wheat went up by a factor of three. 2000s decade During the 2000s, the price of Brent Crude rose above $30 a barrel in 2003 befo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Shock (economics)
In economics, a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it is an unpredictable change in exogenous factors—that is, factors unexplained by an economic model—which may influence endogenous economic variables. The response of economic variables, such as GDP and employment, at the time of the shock and at subsequent times, is measured by an impulse response function. Types of shocks A technology shock is the kind resulting from a technological development that affects productivity. If the shock is due to constrained supply, it is termed a supply shock and usually results in price increases for a particular product. Supply shocks can be produced when accidents or disasters occur. The 2008 Western Australian gas crisis resulting from a pipeline explosion at Varanus Island is one example. A demand shock is a sudden change of the pattern of private expenditure, especially of consumption spendin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Technology Shocks
Technology shocks are sudden changes in technology that significantly affect economic, social, political or other outcomes. In economics, the term technology shock usually refers to events in a macroeconomic model, that change the production function. Usually this is modeled with an aggregate production function that has a scaling factor. Normally reference is made to positive (i.e., productivity enhancing) technological changes, though technology shocks can also be contractionary. The term “shock” connotes the fact that technological progress is not always gradual – there can be large-scale discontinuous changes that significantly alter production methods and outputs in an industry, or in the economy as a whole. Such a technology shock can occur in many different ways. For example, it may be the result of advances in science that enable new trajectories of innovation, or may result when an existing technological alternative improves to a point that it overtakes the domina ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Commodity
In economics, a commodity is an economic goods, good, usually a resource, that specifically has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to who Production (economics), produced them. The price of a commodity good is typically determined as a function of its market as a whole: well-established physical commodities have actively traded spot market, spot and derivative (finance), derivative markets. The wide availability of commodities typically leads to smaller profit margins and diminishes the importance of factors (such as brand, brand name) other than price. Most commodities are raw materials, basic resources, agriculture, agricultural, or mining products, such as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such as chemical substance, chemicals and computer memory. Popular commodities include Petroleum, crude ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
