ABSTRACT
Economists have been concerned with uncertainty and its effects on economic behaviour and outcomes for some time. But only recently has the term ‘hysteresis’ become popular in economic theory. Although interest in the influence of history in economic models and the idea of path dependence are not new (Currie and Steedman 1990; Setterfield 1995), the literature on hysteresis is more recent, having grown and developed since the mid-1980s.
