What is hysteresis?

I recently wrote an article on the situation in Greece, and mentioned the effects of hysteresis which I will expand upon in this blog article. Hysteresis is a theory developed by the Keynesians to explain why laissez-faire economic policy may be damaging in the long run. Neoclassicalists would argue that during an economic downturn, when Read more about What is hysteresis?[…]

The Economic Implications of a Greek Default

A lot of media attention has recently been focusing on the potential for a Greek default and exit from the Eurozone, and last Tuesday night Greece failed to repay its IMF loan, becoming the first developed country to default with the IMF. Last Sunday Greece also imposed capital controls to prevent capital flight from occurring. Capital flight Read more about The Economic Implications of a Greek Default[…]