Difference between revisions of "Hysteresis"

From ACT Wiki
Jump to: navigation, search
(Create page. Sources: linked pages, Investopedia page https://www.investopedia.com/terms/h/hysteresis.asp)
 
(Add link.)
 
(4 intermediate revisions by the same user not shown)
Line 3: Line 3:
 
Hysteresis in economics is the persistence of an effect, after the initial factors that led to that event have been removed.  
 
Hysteresis in economics is the persistence of an effect, after the initial factors that led to that event have been removed.  
  
Hysteresis can occur following a recession when the unemployment rate continues to increase despite growth in the economy.
+
For example, hysteresis can occur following a recession when the unemployment rate continues to increase despite growth in the economy.
  
  
Line 15: Line 15:
 
== See also ==
 
== See also ==
 
* [[Bank of England]]
 
* [[Bank of England]]
 +
* [[Creative destruction]]
 +
* [[Depression]]
 
* [[Downside risk]]
 
* [[Downside risk]]
 
* [[Easing]]
 
* [[Easing]]
 
* [[Economics]]
 
* [[Economics]]
 
* [[Equilibrium unemployment]]
 
* [[Equilibrium unemployment]]
 +
* [[Friction]]
 
* [[Inflation]]
 
* [[Inflation]]
 
* [[Monetary Policy Committee]]
 
* [[Monetary Policy Committee]]
 
* [[Recession]]
 
* [[Recession]]
 +
* [[Scarring]]
 
* [[Tightening]]
 
* [[Tightening]]
  

Latest revision as of 17:25, 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