It takes time to fatten a hog, or build a building, or ship something from far away. In the interim, prices can fluctuate significantly. Too many economic models forget about these dynamics. But the short-term fluctuations can matter a lot, on our way to the long-term.
Stock–flow lags The second kind of lag – stock–flow lags – also produces hog cycles, for slightly different reasons. These lags are the inherent implication of past activity having long-lived consequences. They can be seen in the property market, in the shipping fleet – indeed in most classes of capital goods.