Hysteresis

In economics, the notion of hysteresis holds that current issues are affected by history i.e. current and future economic impacts will persist even if the drivers of the historical impact no longer exist. It is applied to unemployment, trade and inflation. In decision science, hysteresis refers to the time-lag between an event happening and people recognizing that it has happened, and so starting to react to it. Psychology borrows the term from physical science, where it refers to an object’s tendency to react less than may be expected when forces are exerted on it.