Thursday , October 18 2018
Home / Thomas Palley: Economics for Democratic and Open Societies / A Theory of Economic Policy Lock-in and Lock-out via Hysteresis: Rethinking Economists’ Approach to Economic Policy

A Theory of Economic Policy Lock-in and Lock-out via Hysteresis: Rethinking Economists’ Approach to Economic Policy

Summary:
This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy’s structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that block policy reversals also cause lock-in. Conventional thinking treats policy as a dial ...

Topics:
Thomas Palley considers the following as important:

This could be interesting, too:

Lars Syll writes Too much of ‘we controlled for’

Dan Crawford writes Open thread October 17, 2018

Editor writes The 2008 Economic Crisis Ten Years On

David F. Ruccio writes Goosing the golden goose (2 graphs)

This paper uses hysteresis to develop the concept of policy lock-in and lock-out. Policy changes may near-irrevocably change the economy’s structure, thereby changing the distribution of wealth, income and power. That may lock-in policy by changing the political equilibrium. Exit costs that block policy reversals also cause lock-in. Conventional thinking treats policy as a dial [...]
Thomas Palley
Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University.

Leave a Reply

Your email address will not be published. Required fields are marked *