Question

How does Implementation lag affect economic policies?

Answer 1

Implementation lags contain recognition and adminstration lag. Implementation lag is the time between macroeconomic shock and efforts to counter its effect. In other words the time lag any government or its counterparts take to make and execute any policy .

It affects economic policies because all these policies go through bureaucratic measures and this creates a delay in the implementation of policies. Sometimes this implementation lag renders the effect of the policy less effective or useless because of the lag . Sometimes during this lag, it is quite possible that underlying situtaion might have changed , so the policy inititally implemented might now have an opposite effect than intended.

The existence of these lags is an obstacle in effective implementation of policy

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