langtímaframboð

Langtímaframboð refers to the aggregate supply of goods and services in an economy over an extended period. Unlike short-run aggregate supply, which is influenced by sticky wages and prices, long-run aggregate supply assumes that all factors of production are fully employed and that prices and wages are flexible. This means that in the long run, the economy's output is determined by its available resources, such as labor, capital, technology, and natural resources. The long-run aggregate supply curve is typically depicted as a vertical line at the potential output level.

Changes in long-run aggregate supply are driven by shifts in these fundamental factors. For instance, technological advancements can increase productivity, allowing the economy to produce more output with the same amount of resources. Similarly, an increase in the capital stock through investment or a growth in the labor force can also expand the economy's productive capacity. Discoveries of new natural resources or improvements in the quality of education and human capital can also lead to an outward shift of the long-run aggregate supply curve, indicating a higher potential output.

In the long run, the economy tends to gravitate towards its potential output level. Fluctuations in aggregate demand may cause temporary deviations from this potential, but in the absence of further supply shocks or policy interventions, the economy will adjust back to its long-run equilibrium. Therefore, policies aimed at increasing long-run aggregate supply are crucial for sustainable economic growth and improvements in living standards. These policies often focus on fostering innovation, promoting investment, enhancing education and training, and ensuring efficient resource allocation.