We study how the output gap affects potential output over time-i.e., the dynamic hysteresis effect. To do so, we … introduce novel unobserved components (UC) models that consider hysteresis as a sequence of lagged effects, thus separating the … hysteresis effects after the 1970s, with the negative long-run effect of the Global Financial Crisis and the COVID-19 recessions …

of hysteresis. To achieve these objectives, a novel approach is employed, which integrates the analysis of both growth … potential output or capacity of the EA-12 MS, thereby supporting the existence of hysteresis. However, the impacts appear to be …

enables hysteresis to be taken into account. Hysteresis is likely to show up in unemployment but it can also affect the … capital stock due to the existence of long investment cycles. In the proposed model, hysteresis may affect all the factor … be computed that are hysteresis-free and less prone to volatility. A complementary measure of the output gap that takes …

The German unemployment rate shows strong signs if non-stationarity over the course of the previous decades. This is in … line with an insider-outsider model under full hysteresis. We applied a "theory-guided view" to the data using the … structural VAR model as developed by Balmaseda, Dolado and López-Salido (2000) allowing for full hysteresis on the labour market …

containing GDP, unemployment (or price), real wage and the real exchange rate, four structural shocks are identified; Velocity …, unemployment, price, real wage and the real exchange rate. The results are robust to alternative specifications of the model and …