The hypothesis in economics known as hysteresis is that

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The hypothesis of hysteresis suggests that the path of real GDP in an economy can influence that economy's level of potential output. In other words, if the economy experiences a recession or other negative shock, its potential output may permanently decrease, even after the initial shock has passed. This contrasts with the traditional view that potential output is determined by factors like capital, labor, and technology, and is not affected by short-term fluctuations in the economy.

The Hypothesis in Economics Known as Hysteresis Is That