Principles of Macroeconomics / Unit 8 MAC 0708 short lesson, about 20 seconds
The Short Run and the Long Run
Captions available
The idea
In macroeconomics the short run is the period in which wages and some prices are sticky. The long run is the period in which they have fully adjusted.
In practice
The definition is about flexibility, not about a number of months.
Where people slip
That is why output can sit away from potential in the short run and returns to it in the long run.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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