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IMPLEMENTATION LAG: In the context of economic policies, the time between the realization that a shock to the economy has occurred and corrective government action responding to the shock. This is one of several policy lags that limit the effectiveness of stabilization policies designed to correct business-cycle fluctuations. This is also one of two inside lags. The other is a recognition lag. The implementation lag, which is often divided into decision and action lags, emerges due to the time it takes for government leaders to debate, discuss, and decide on the appropriate policy then get the appropriate government agencies to launch the policy. The implementation lag is usually shorter for monetary policy than fiscal policy.

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POLITICAL ENTREPRENEURS

Election seeking politicians who undertake risks inherent in the allocation of resources made through government actions. Like business entrepreneurs, political entrepreneurs take risks and organize production. They organize production with government laws, regulations, and policies. They run the risk of failed policies and losing elections. Their utility-maximizing actions are also a prime source of government failure. Falling victim to the principal-agent problem, pursuit of their own satisfaction (winning elections) often conflicts with what is best for the rest of society.

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BROWN PRAGMATOX
[What's This?]

Today, you are likely to spend a great deal of time watching the shopping channel seeking to buy either a large red and white striped beach towel or a bottle of blackcherry flavored spring water. Be on the lookout for crowded shopping malls.
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This isn't me! What am I?

Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
"It is only our deeds that reveal who we are. "

-- Carl Jung, psychiatrist

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National Association of Securities Dealers
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