General equity risk and Hysteresis: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Create the page. Sources: linked pages.)
 
imported>Doug Williamson
(Add link.)
 
Line 1: Line 1:
The risk of losses on equity investments or on other equity-linked positions arising from a general change in equity market prices.
''Economics.''
 
Hysteresis in economics is the persistence of an effect, after the initial factors that led to that event have been removed.
 
For example, hysteresis can occur following a recession when the unemployment rate continues to increase despite growth in the economy.
 
 
:<span style="color:#4B0082">'''''Hysteresis costs'''''</span>
 
:"It is safer to err on the side of easing somewhat too much, and then if necessary tighten as capacity pressures eventually build, rather than ease too little and find the economy gets stuck in a low inflation rut with increased hysteresis costs."
 
:''Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.''




== See also ==
== See also ==
* [[Equity risk]]
* [[Bank of England]]
* [[Specific equity risk]]
* [[Depression]]
* [[Downside risk]]
* [[Easing]]
* [[Economics]]
* [[Equilibrium unemployment]]
* [[Inflation]]
* [[Monetary Policy Committee]]
* [[Recession]]
* [[Tightening]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]

Revision as of 13:19, 20 June 2020

Economics.

Hysteresis in economics is the persistence of an effect, after the initial factors that led to that event have been removed.

For example, hysteresis can occur following a recession when the unemployment rate continues to increase despite growth in the economy.


Hysteresis costs
"It is safer to err on the side of easing somewhat too much, and then if necessary tighten as capacity pressures eventually build, rather than ease too little and find the economy gets stuck in a low inflation rut with increased hysteresis costs."
Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.


See also