A Test for Strong Hysteresis
AbstractThe mathematical definition of systems with hysteresis, that is nonlinear input-output systems with memory, is different from the definition usually applied to economic systems. Economic theory and modelling practice have almost always specified simple dynamic systems with regular leads and lags in their responses, corresponding to input-output systems with unit or zero (or at least stable) roots. These models cannot capture the "selective memory" feature of hysteretic behaviour, that is, the influence only of certain past events (typically, non-dominated sequences of previous peaks and troughs). There is therefore a difficulty in testing for and validating economic models containing hysteretic behaviour; appropriate empirical tests have not been developed. In particular, the usual unit vs. zero (or stable) root tests used in econometric analysis are unable to detect hysteretic behaviour or to distinguish it from more conventional economic behaviour. The purpose of this paper is to propose a new way of testing for hysteresis, by drawing on some ideas in the mathematical/control theory literature and adapting them to fit into the economic frameworks with elements of hysteresis. Citation Copyright 2000 by Kluwer Academic Publishers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 1997 with number 2.
Date of creation:
Date of revision:
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Albers, Scott, 2013. "Okun’s Law as a Pi-to-1 ratio: A harmonic / trigonometric theory as to why Okun’s Law works," MPRA Paper 46633, University Library of Munich, Germany.
- Göcke, Matthias, 2012. "Play-hysteresis in supply as part of a market model," Discussion Papers 61, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Yu-Fu Chen & Gylfi Zoega, 2010.
"Strong Hysteresis due to Age Effects,"
Dundee Discussion Papers in Economics
230, Economic Studies, University of Dundee.
- Xavier Raurich & Hector Sala Lorda & Valeri Sorolla, 2004.
"Unemployment, growth and fiscal policy: new insights on the hysteresis hypothesis,"
wpdea0404, Department of Applied Economics at Universitat Autonoma of Barcelona.
- Raurich, Xavier & Sala, Hector & Sorolla, Valeri, 2006. "Unemployment, Growth, And Fiscal Policy: New Insights On The Hysteresis Hypothesis," Macroeconomic Dynamics, Cambridge University Press, vol. 10(03), pages 285-316, June.
- Xabier Raurich & Hector Sala & Valeri Sorolla, 2005. "Unemployment, growth and fiscal policy: new insights on the hysteresis hypothesis," Working Papers 0502, International Economics Institute, University of Valencia.
- Raurich, Xavier & Sala, Hector & Sorolla, Valeri, 2004. "Unemployment, Growth and Fiscal Policy: New Insights on the Hysteresis Hypothesis," IZA Discussion Papers 1127, Institute for the Study of Labor (IZA).
- Tesfatsion, Leigh, 2002.
"Hysteresis in an Evolutionary Labor Market with Adaptive Search,"
Staff General Research Papers
10035, Iowa State University, Department of Economics.
- Leigh Tesfatsion, 2000. "Hysteresis in an Evolutionary Labor Market with Adaptive Search," Computational Economics 0004003, EconWPA.
- bruno amable & jerome henry & frederic lordon & richard topol, 2005. "Complex Remanence vs. Simple Persistence: Are Hysteresis and Unit-Root Processes observationally equivalent?," Computational Economics 0501001, EconWPA.
- Hughes Hallett, A. J. & Piscitelli, Laura, 2002. "Testing for hysteresis against nonlinear alternatives," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 303-327, December.
- Ansgar Belke & Matthias Göcke & Laura Werner, 2014. "Hysteresis Effects in Economics – Different Methods for Describing Economic Path-dependence," Ruhr Economic Papers 0468, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Richards, Timothy J. & Patterson, Paul M., 2002.
"Causes Of Retail Price Fixity: An Empirical Analysis,"
2002 Annual meeting, July 28-31, Long Beach, CA
19841, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Richards, Timothy J. & Patterson, Paul M., 2004. "Causes of retail price fixity: an empirical analysis," Journal of Economics and Business, Elsevier, vol. 56(2), pages 117-136.
- Göcke, Matthias, 2013. "Play-Hysteresis in Supply as Part of a Market Model," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79695, Verein für Socialpolitik / German Economic Association.
- Leigh Tesfatsion, 1999. "Market Power Effects on Worker-Employer Network Formation in Evolutionary Labor Markets with Adaptive Search," Computing in Economics and Finance 1999 543, Society for Computational Economics.
- Belke, Ansgar & Göcke, Matthias, 2004.
"Real Options Effects on Employment: Does Exchange Rate Uncertainty Matter for Aggregation?,"
IZA Discussion Papers
1126, Institute for the Study of Labor (IZA).
- Ansgar Belke & Matthias Göcke, 2005. "Real Options Effects on Employment: Does Exchange Rate Uncertainty Matter for Aggregation?," German Economic Review, Verein für Socialpolitik, vol. 6(2), pages 185-203, 05.
- I. Agur, 2003. "Trade-volume hysteresis: an investigation using aggregate data," WO Research Memoranda (discontinued) 740, Netherlands Central Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.