Long-term refers to the time period during which producers can adjust the quantity of all production factors. In the long run, producers can adjust all factor inputs.
The criteria for dividing long-term and short-term are different in different business disciplines. As far as macroeconomics is concerned, the time range for which prices cannot be flexibly changed is short-term, and the time for which prices can be flexibly changed is long-term.
Extended data
Technology, capital and labor force are the three major factors that promote economic development for a long time. According to Wikipedia, capital here refers to assets that can play a role in economic activities (in economics, capital refers to assets that can enhance a person's ability to do economically useful work).
From this point of view, there are only three directions to achieve long-term economic growth: improving technology, increasing capital and increasing labor force, and other methods are useless. Therefore, in the long run, increasing or decreasing the amount of money has no effect on the actual economic growth, but will only increase or decrease the prices of all commodities as a whole.
Factors affecting output in the short term: In the short term, if the price cannot change flexibly, the macro-economy will be affected by monetary and fiscal policies.
Take the real macro economy as an example. In 2008, the American financial crisis also had an impact on China's economy. In order to offset the impact of the US financial crisis on China's economy, we launched a fiscal stimulus plan called "4 trillion plan". The general idea of this plan is that the government will buy 4 trillion commodities and services to help China's economy cope with the financial crisis.
This extremely loose fiscal policy has indeed increased the economic output in a short time, and prevented China's economy from entering recession with the global economy. But in the long run, since such a fiscal policy does not affect any of technology, capital and labor, in the long run, 4 trillion yuan can't really improve the economy, but only alleviate the problems faced at that time.
In the short term, the effect of monetary policy is similar to that of fiscal policy, which can stabilize short-term economic fluctuations, but it can not promote economic development in the long term.
Baidu encyclopedia-short-term?
Baidu Encyclopedia-Long Term