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Complex Remanence vs. Simple Persistence: Are Hysteresis and Unit-Root Processes Observationally Equivalent?

In: Economic Complexity

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  • BRUNO AMABLE
  • JEROME HENRY
  • FREDERIC LORDON
  • RICHARD TOPOL

Abstract

The hysteresis terminology has mainly been used in two fields of economics, unemplyment and international trade, with a different meaning however, involving either linear autoregressive macro behaviour or non- linear heterogenous mico behaviour. There may nonetheless be observational equivalence between the 'persistence' characterising unit- root processes and the 'remanence' created by the aggregation of non- linear dynamics. Stochastic simulations are employed to analyse the properties of the output of an hysteretic system, subject to white noise and random walk inputs. Non-linear hysteretic systems are found to generate a sizeable proportion - two-thirds - of stationary output from stationary input, and to possibly generate an output cointegrated with the corresponding input. Such processes therefore appear significantly different from an integrated process. This stresses the specific relevance of a non-linear approach to hysteresis.
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  • Bruno Amable & Jerome Henry & Frederic Lordon & Richard Topol, 2004. "Complex Remanence vs. Simple Persistence: Are Hysteresis and Unit-Root Processes Observationally Equivalent?," International Symposia in Economic Theory and Econometrics, in: Economic Complexity, pages 67-89, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:isetez:s1571-0386(2004)0000014006
    DOI: 10.1108/S1571-0386(2004)0000014006
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    Cited by:

    1. Christian Bayer & Falko Jüßen, 2007. "Convergence in West German Regional Unemployment Rates," German Economic Review, Verein für Socialpolitik, vol. 8(4), pages 510-535, November.
    2. repec:hal:spmain:info:hdl:2441/hiaqa97n684boj041a440irqd is not listed on IDEAS
    3. G Dosi & M C Pereira & A Roventini & M E Virgillito, 2018. "Causes and consequences of hysteresis: aggregate demand, productivity, and employment," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(6), pages 1015-1044.
    4. Nicola Viegi & Vincent Dadam, 2023. "Investigating unemployment hysteresis in South Africa," Working Papers 11043, South African Reserve Bank.
    5. repec:hal:spmain:info:hdl:2441/4h9cnu4n2k8tfri093jil1d739 is not listed on IDEAS
    6. Bassi, Federico & Lang, Dany, 2016. "Investment hysteresis and potential output: A post-Keynesian–Kaleckian agent-based approach," Economic Modelling, Elsevier, vol. 52(PA), pages 35-49.
    7. Giovanni Dosi & Marcelo C. Pereira & Andrea Roventini & Maria Enrica Virgillito, 2018. "Causes et consequences of hysteresis : aggregate demand, productivity and employment," Sciences Po publications info:hdl:2441/4h9cnu4n2k8, Sciences Po.
    8. Váry, Miklós, 2018. "A hiszterézis közgazdasági jelentőségéről posztkeynesi szemléletben [The economic relevance of hysteresis from a post-Keynesian perspective]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1006-1047.
    9. repec:bla:germec:v:8:y:2007:i::p:510-535 is not listed on IDEAS
    10. Giovanni Dosi & Marcelo Pereira & Andrea Roventini & Maria Enrica Virgillito, 2018. "Causes et consequences of hysteresis : aggregate demand, productivity and employment," Sciences Po publications info:hdl:2441/hiaqa97n684, Sciences Po.

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