Nevertheless, business investment declined by 4 per cent in the quarter, as the large rise in uncertainty significantly curtailed investment plans. [1] The effect of the uncertainty has significantly outweighed the stimulatory effect of the decline in business borrowing costs.
Fundamentally these are questions about distinguishing between structural change and lags. This brings me to my topic tonight. What Lags Are A lag occurs in any instance where time passes between when an activity is initiated and when that activity has its impact. Almost all economic phenomena involve lags. Not all of these lags are significant, of course.