Unfortunately, a country or society can lose productive capabilities. Natural disasters such as earthquakes, tornados, hurricanes, and floods can cause much death and destruction. The lose of life and property also affects a country's ability to produce goods and services leading to a shift inward of its PPF, as can war and, as was observed in the US on September 11th 2001, acts of terrorism. On the graph to the right, PPF1 represents some country's PPF for Education and Health Care before some calamity. The result of some natural or human-caused disaster shifts the PPF inward to PPF2. All the points on PPF1 and in the shaded region labeled No Longer Attainable are now out of reach of this society unless or until it rebuilds its productive capability.
An economic recession can, over time, also cause a PPF to shift inward. In the short run a recession is an underemployment of resources. A persistent recession reduces the ability of companies to replace worn out capital equipment and to train and replace laid-off or retired skilled workers. Over time this causes the productive capabilities of the economy to diminish, shifting the PPF inward.
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