Hysteresis

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Related to Hysteresis effect: Hysteresis loss

Hysteresis

Used to characterize a lagging effect. Firms may fail to enter markets that appear attractive, or firms that are once invested in a market may persist in operating at a loss. The effect is characteristic of investments with high entry and exit costs along with high uncertainty.

Hysteresis

In economics, a situation or indicator that persists despite evidence that it should not. For example, the unemployment rate tends to remain high even after GDP growth has resumed, in part because business owners are afraid that growth will turn negative again even if they have no rational reason for believing so. One may think of hysteresis as an economy's collective memory. See also: Lagging indicator.
References in periodicals archive ?
An investigation of air traffic control (ATC) operational errors showed that a high proportion of near misses occurred after a period of sustained high workload, suggesting that the hysteresis effect may have been a strong contributor (East, 1993; Smolensky, 1990).
Hence, we find little evidence in favour of insider hysteresis effects in the Norwegian wage formation process.
Various surveys (Burns, 1990A; Coe, 1989; Gera et al., 1990) provide support for hysteresis effects, although it is very difficult, if not impossible, to distinguish empirically between unemployment hysteresis and slow labour-market adjustment.
where r is the interest rate on government bonds, g is the growth rate of potential output, [eta] is the hysteresis effect of current output on future potential output, [tau] is the tax rate, and p is the government spending multiplier.
As these materials evolve, the magnitude of the hysteresis effects may change.
Then we derive our rules of thumb for assessing the importance of hysteresis effects for a given path of adjustment and set of initial conditions.
However, a full review will not be presented here since the purpose is simply to show how hysteresis effects may be directly related to the direction of wetting, i.e.
Similarly, the permeability coefficient characteristic curves of two kinds of red mud also reveal the significant hysteresis effect. Moreover, the hysteresis effect of permeability coefficient characteristic curve of Bayer red mud is significantly higher than that of sintering red mud.
Further, the hysteresis effect, owing to the specific relationship between headquarters and their foreign subsidiaries, is a crucial but rarely examined phenomenon.
The chosen set of conditions has a closing and an opening cycle available to demonstrate the accuracy of the hysteresis effect modeled in the simulation.
During this period, the rainfall was small and the reservoir water level was in the slow decline stage, coupled with the hysteresis effect that groundwater variation lags behind reservoir level; as a result, the change in seepage field in the landslide was not obvious, and there is no major change in displacement field.
However, a hysteresis effect was observed as measured capacitance lagged at higher levels during drying.