Ratchet Effect

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August 31, 2024 5 min read Definitions
Ratchet Effect: An Irreversible Change in Economic Variables
Economics Finance Ratchet Effect Economic Theory Inflation Price Stickiness Wage Stickiness
The Ratchet Effect refers to an irreversible change to an economic variable, such as prices or wages, which tends to remain elevated even after the original economic pressures subside, potentially fueling inflation.
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August 31, 2024 5 min read Definitions
Ratchet Effect: The Sticky Upward Trend
Economics Finance Behavioral Economics Ratchet Effect Inflation Sticky Prices Wage Dynamics Economic Theory
The Ratchet Effect refers to the tendency for a variable to be influenced by its own highest previous value, creating a one-way upward stickiness.
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August 24, 2024 3 min read Definitions
Ratchet Effect in Economics: Definition, Examples, and Implications
Economics Finance Ratchet Effect Economics Economic Theory Irreversible Processes Economic Implications
A comprehensive exploration of the ratchet effect in economics, showcasing its definition, historical context, practical examples, and wider implications.
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