Journal article

Publication year: 2001

Pages: 449-473

Journal: Metroeconomica: International Review of Economics

Volume number: 52

Issue number: 4

DOI Link: https://doi.org/10.1111/1467-999X.00129

Publisher: Wiley

Abstract: 

The continuous non-linear macro-hysteresis loop is approximated by a rhombus shaped path which therefore shows a closer affinity to the genuine concept of hysteresis than conventional techniques via difference equations. This linearized model is applied to implement foreign trade hysteresis in a standard macroeconomic simultaneous equation model demonstrating the persisting consequences of only temporary exogenous shocks on national income, interest rate and the determination of the exchange rate. Since hysteresis in foreign trade is analysed in a macroeconomic framework, the feedback of hysteresis caused by exchange rate variations on the exchange rate itself can be illustrated.

Harvard Citation style: Göcke, M. (2001) A Macroeconomic Model with Hysteresis in Foreign Trade, Metroeconomica, 52(4), pp. 449-473. https://doi.org/10.1111/1467-999X.00129

APA Citation style: Göcke, M. (2001). A Macroeconomic Model with Hysteresis in Foreign Trade. Metroeconomica. 52(4), 449-473. https://doi.org/10.1111/1467-999X.00129