Overview

adverse supply shock


'adverse supply shock' can also refer to...

 

More Like This

Show all results sharing this subject:

  • Economics

GO

Show Summary Details

Quick Reference

An unexpected shift of the supply curve to the left, i.e. a reduction in the quantity supplied for any given price. This could result from natural disasters such as floods or earthquakes; from human, animal, or plant diseases; or from major political upheavals such as war or revolution. To oil importers, the sudden price increases imposed by the Organization of Petroleum Exporting Countries in the 1970s appeared as adverse supply shocks. Such a shock reduces the real income an economy can produce even at full employment of its available resources. Supply shocks are used as a modelling device in macroeconomics to represent aggregate economic risk.

Subjects: Economics.


Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content. subscribe or login to access all content.