Hysteresis in the Fundamentals of Macroeconomics

Rod Cross, Hugh McNamara, Alexei Pokrovskii, Leonid Kalachev

Research output: Working paperDiscussion paper

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Abstract

Two fundamental problems in economic analysis concern the determination of aggregate output, and the determination of market prices and quantities. The way economic adjustments are made at the micro level suggests that the history of shocks to the economic environment matters. This paper presents tractable approach for introducing hysteresis into models of how aggregate output and market prices and quantities are determined.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-34
Number of pages35
Volume10
Publication statusPublished - 2010

Keywords

  • hysteresis
  • aggregate ouput
  • market supply and demand

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