The phrase “in the short run” is one of many idiomatic expressions in the English language. It originated in conversational English in the 1800s and has come to be associated with economic theory, although it is still in wider use in conversational English. The phrase is often used to refer to events or possible outcomes that will take place in the near future and likely not persist forever. Events that will take place at a more distant point in the future and may persist, in contrast, are said to take place “in the long run.”
This phrase probably evolved from the phrase “in the long run” which likely originally referred to actual physical distance. That phrase gradually acquired a less specific meaning. At that point in the 1800s, it became natural to discuss the short run in contrast to the long run.
The short run was given a more specific meaning by academic economists. They refer to things taking place “in the short run” when some of the key factors of economic production are fixed. This means that physical and time constraints would prevent a firm from leaving a business entirely or a new firm from entering that business. Expansion or reduction of the means of production are also limited in the short run, as factories take time to set up or close regardless of the potential profit or loss involved.
In the long run, in contrast to the short run, economic theory suggests that all key factors of production are changeable. In the long run, whole new firms can emerge and enter profitable fields. Firms can modify production to whatever degree economic forces dictate and build or dispose of facilities as needed.
These phrases have remained part of ordinary conversational English although their use by economists has led to an association with business activities. Discussion of the short run generally implies that a long run exists, a time at which some of the factors applying to the more immediate short run might have changed drastically. This is true both when the phrase is used to discuss issues related to business and when it is used more generally.
For example, the price of agricultural products might be “likely to fall in the short run due to good harvests.” This phrase indicates a limited time period over which a change in market conditions will persist. That temporary change is understood to be impermanent as the short run will eventually end.
The long run and short run are handy concepts and are used to contrast the temporary short term and permanent long term more generally. In the short run, it might be a good idea for a university student to skip a class and catch up on much-needed sleep. In the long run, however, the costs of this action might outweigh the benefits.
