There are many terms in economics whose definitions drift towards either the higher branches of mathematics or the more esoteric regions of history. But it’s a very simple, everyday term that has economists most up in arms.
In response to a question about the internal debates that have their industry-insiders grinding their teeth (while the rest of us barely take notice), commenter Snow explained how one very simple turn of phrase is turning out to be anything but for economists.
That phrase in question? “Long term”, and the lack of any exacting perimeters for its definition may be something that those of us who don’t routinely crack on economics textbook should take notice of as well, for some very practical reasons:
Economist here... One of the biggest and oldest debates in my field is “what does long term means?” Sounds pretty dumb at first, but has some major implications when it comes to economic policies. For example, there’s this idea that increasing inflation also increases labor on the short term; the reason is that because salaries don’t increase accordingly on the short term (since contracts are somewhat fixed), employers may hire more people because their salaries cost less because of the inflation; however, on the “long term”, people will realize they’re geting payed less than they were expecting and will either renegotiate their salaries (which might force employers to fire people to keep up with the costs) or just quit. Most economists can’t agree wether this would increase labor for a year, a semester, a trimester, a month or if it just doesn’t work at all.
By the way, this is just an oversimplified example and there are other factors involved that might change the results of this particular thought experiment... Economy deals with human behavior, and humans are not that simple...
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