To the extent that this happens gradually over a period, inflation may be reduced, but only until prices reach their new, lower equilibrium level.

ECONOMIST: A thinkers’ guide | The

This does not, however, reduce the structural surplus of savings over domestic investment, since private investment is also above its equilibrium level to a similar degree.

ECONOMIST: Entertaining economics?

The supply of real estate is fixed in the short term, so increased demand from a few optimistic investors will push prices above their equilibrium level.

ECONOMIST: Why property markets suffer from bubble trouble

The spurt in productivity growth in America has pushed up share prices in anticipation of future productivity gains, and also improved the competitiveness of American goods, thus increasing the dollar's long-term equilibrium level.

ECONOMIST: Test-driving a new model

George Alogoskoufis, an economist at the Athens School of Economics, and Richard Portes, of the London Business School, argue that shifts in portfolios could push the euro temporarily above its long-run equilibrium level.

ECONOMIST: Why non-Europeans should care about EMU

As lower costs encourage firms to produce more at any given price (ie, the supply curve shifts from S1 to S2 in the chart), the long-term equilibrium level of output will rise and the price level will fall.

ECONOMIST: A thinkers’ guide | The

In our analysis of the impact of Japan's demography, we have shown that the current level of private-sector gross savings is indeed higher than we would expect in equilibrium.

ECONOMIST: Entertaining economics?