Path dependence
A concept according to which economic processes progress towards a unique predetermined equilibrium but instead reach one of many equilibria, depending on the process of getting there along a particular path. It implies irreversibility of the effect of transitory random shocks, or accidental events, upon the long-run outcome. See also hysteresis.
Reference: Oxford Press Dictonary of Economics, 5th edt.
More definitions
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >
