Macroeconomics › Section K · The aggregate demand and aggregate supply model › Topic K.3
Shifts in aggregate supply
When oil prices soar, a harvest fails or a new technology spreads, the whole supply side of the economy moves. Knowing which supply curve shifts, short-run or long-run, and in which direction, explains booms with falling prices and the grim mix of slump and inflation called stagflation.
In this topic
- What a supply shift means
- Productivity growth
- Input prices
- Worked example: an oil price shock
- Stagflation
- A policy dilemma
- Favourable supply shocks
- Other supply shocks
- Worked example: which supply curve shifts?
- Common mistakes to avoid
- Key takeaways
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