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Chapters from Economic Theories on Hysteresis

Author

Listed:
  • Posgay, István
  • Regős, Gábor
  • Horváth, Diána
  • Molnár, Dániel

Abstract

Since the economic and financial crisis of 2008, proposals on economic policy devised on the basis of hysteresis have become the focus of economic sciences. This study presents some theories on the 2008 crisis and subsequent hysteresis, as well as related economic policy proposals. The crisis and hysteresis acted as theoretical catalysts and, by expanding the boundaries of previous main theories, sometimes produced significant results, and continue to do so to this very day. Hysteresis is also significant from the point of view of the Hungarian economy, as the crisis has hit the country particularly hard. However, as a result of the post-2010 economic policy shift, the government has been able to rebalance and put the economy back on a growth path. This can also be called a positive hysteresis, as the economy is growing steadily and faster than expected based on this trend.

Suggested Citation

  • Posgay, István & Regős, Gábor & Horváth, Diána & Molnár, Dániel, 2019. "Chapters from Economic Theories on Hysteresis," Public Finance Quarterly, Corvinus University of Budapest, vol. 64(3), pages 414-432.
    • Handle: RePEc:pfq:journl:v:64:y:2019:i:3:p:414-432
    DOI: https://doi.org/10.35551/PFQ_2019_3_6
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    References listed on IDEAS

    as
    1. Stiglitz, Joseph, 2012. "Macroeconomics, Monetary Policy, and the Crisis," MIT Press Book Chapters, in: Blanchard, Olivier J. & Romer, David & Spence, Michael & Stiglitz, Joseph E. (ed.), In the Wake of the Crisis: Leading Economists Reassess Economic Policy, edition 1, volume 1, chapter 4, pages 31-42, The MIT Press.
    2. Blanchard, Olivier J. & Romer, David & Spence, Michael & Stiglitz, Joseph E. (ed.), 2012. "In the Wake of the Crisis: Leading Economists Reassess Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026201761x, December.
    3. Charles J. Whalen & Felix Reichling, 2015. "The Fiscal Multiplier And Economic Policy Analysis In The United States," Contemporary Economic Policy, Western Economic Association International, vol. 33(4), pages 735-746, October.
    4. Joseph E. Stiglitz, 2015. "Reconstructing Macroeconomic Theory to Manage Economic Policy," Palgrave Macmillan Books, in: Éloi Laurent & Jacques Cacheux (ed.), Fruitful Economics, chapter 1, pages 20-56, Palgrave Macmillan.
    5. repec:mtp:titles:026201761x-04 is not listed on IDEAS
    6. Lawrence H Summers, 2014. "U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 49(2), pages 65-73, April.
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    More about this item

    Keywords

    technological development; innovation; financial cycles; cycle and trend; secular stagnation; fiscal multiplier;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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