demand shock
n. A sudden and large decrease in demand for goods and services.
"The commodity markets are reflecting reduced demand [from Asia], but in some cases, particularly energy and agriculture, oversupply has been the real problem. People are missing the distinction between a demand shock and a supply shock," says Steve Strongin, head of commodities research at Goldman Sachs in New York.
—Terzah Ewing, “Not all commodities slumps related to Asia,” The Globe and Mail (Canada), September 01, 1998
Meanwhile, with a single interest rate and one currency across Europe, member countries will lose discretion to adjust monetary policies to demand shocks while the automatic responses that markets provide to such shocks — falling real interest rates and falling currencies — will be gone.
—John Jay, “Why one wise American says euro is bad for prices and jobs,” The Sunday Times (London), November 16, 1997
1976 (earliest)
Preliminary research by Joanna Gray and others indicates that full indexing increases macroeconomic stability if the economy only suffers from demand shocks, but in the presence of supply shocks aggravates both inflation and recession.
—Robert J. Gordon, “The Theory of Domestic Inflation,” American Economic Review Proceedings, October 01, 1976
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