Hysteresis revisited: a methodological approach

Amable, Bruno; Henry, Jérôme; Lordon, Frédéric; Topol, Richard

doi:10.1017/cbo9780511559631.010

Cited by 48 publications

(36 citation statements)

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“…The presence of hysteresis implies that temporary shocks can change the structural dynamics which help determine equilibrium unemployment (Amable et al 1995). Thus, in contrast to the natural rate hypothesis (NRH), the shocks associated with the peaks and troughs of actual unemployment are themselves component of the process determining equilibrium unemployment.…”

Section: Hysteresis and Labour Marketmentioning

confidence: 99%

Hysteresis in CEMAC Informal Employment

Njoda

Ulrich

2015

J. Quant. Econ.

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In this empirical study we investigate the hysteresis in informal employment rate for six central African countries for the period 1981-2012. We use a more powerful autoregressive fractionally integrated moving average model. This methodology helps to overcome the well-known problem of low power of traditional unit roots tests. The hypothesis is confirmed for all the countries, except for Gabon and the Republic of Congo.

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Section: Hysteresis and Labour Marketmentioning

confidence: 99%

Hysteresis in CEMAC Informal Employment

Njoda

Ulrich

2015

J. Quant. Econ.

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“…Since the early 1990s (Cross 1993;Amable et al 1995), a small group of economists have applied more formal mathematical methods of analysing economic systems with hysteresis. These methods involve the systems theory generalisation (Krasnosel'skii/Pokrovskii 1989) of the original Preisach (1935) model of electromagnetic hysteresis, making particular use of the Mayergoyz (1991) geometric representation of this analysis.…”

Section: Preisach Models Of Hysteresismentioning

confidence: 99%

Unemployment: natural rate epicycles or hysteresis?*

Cross

2014

European Journal of Economics and Economic Policies: Intervention

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This paper argues that the natural rate of unemployment hypothesis, in which equilibrium unemployment is determined by 'structural' variables alone, is wrong: it is both implausible and inconsistent with the evidence. Instead, equilibrium unemployment is haunted by hysteresis. The curious history of the natural rate hypothesis is considered, curious because the authors of the hypothesis thought hysteresis to be relevant. The various methods that have been used to model hysteresis in economic systems are outlined, including the Preisach model with its selective, erasable memory properties. The evidence regarding hysteresis effects on output and unemployment is then reviewed.

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“…In economics, the notion of hysteresis has generated a number of different formal characterizations (Amable et al, 1995). Hysteresis is typically associated with dynamic linear models characterized by zero root systems for continuous time models or by unit root systems for models in discrete time (Giavazzi and Wyplosz, 1985).…”

Section: 2-hysteresismentioning

confidence: 99%

“…This "reversibility" feature of zero/unit root systems has encouraged some scholars to investigate the properties of systems showing hysteresis. Drawing on the work of the Russian mathematician Mark Krasnosel'skii, it has been argued that a system is hysteretic if it exhibits "remanence", i.e., when the value of the output is permanently affected by an appropriate temporary change in the value of the input (Amable et al, 1995). The crucial point is that, in hysteretic systems, a relevant exogenous force modifying the value of a given parameter λ entails a change in the system dynamics.…”

Section: 2-hysteresismentioning

confidence: 99%

Money Wage Rigidity, Monopoly Power and Hysteresis

Vera

2009

Path Dependency and Macroeconomics

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Abstract:The literature that addresses the effects on the level of aggregate demand of changes in the degree of monopoly typically assumes away the existence of an "inflation barrier" and an inflationtargeting central bank. The presence of these two institutional factors entails that any aggregate demand change brought about by changes in the functional distribution of income will tend to be offset by changes in real interest rates. We postulate a simple macroeconomic model for a closed economy with a government sector and hypothesize that a change in the average mark up affects the inflation rate, the "inflation-barrier" and aggregate demand. The model allows for the analysis of the effects on the employment rate of demand and supply shocks when the economy exhibits asymmetric inflation dynamics (AID) and hysteresis effects. Among other results we find that, if the economy exhibits AID and hysteresis, the effect on the employment rate of a change in the mark up is likely to be either ineffectual or counterproductive even if the associated demand shock is expansionary. We also show that an inadequate functional distribution of income may lead to the occurrence of an aggregate demand deficiency problem.JEL Classification: B50, E12, E24, E50

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Hysteresis revisited: a methodological approach

Cited by 48 publications

References 0 publications

Hysteresis in CEMAC Informal Employment

Hysteresis in CEMAC Informal Employment

Unemployment: natural rate epicycles or hysteresis?*

Money Wage Rigidity, Monopoly Power and Hysteresis

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