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In economics, hysteresis consists of effects that persist after the initial causes giving rise to the effects are removed. Two of the main economics areas where hysteresis effects are invoked for explaining phenomena are unemployment and international trade. It has also been applied in micro-economics to studies of demand responses to changes in price, notably in transport economics where the first published application was on the choice between travelling by two methods of transport, by Goodwin (1977), because habit can be an important influence on daily behaviour.
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