 The existence of hysteresis has been put forward as a possible explanation for the persistently high unemployment of many economies in the 1990s.Hysteresis has been invoked by Olivier Blanchard among others to explain the differences in long run unemployment rates between Europe and the United States.Labor market reform (usually meaning institutional change promoting more flexible wages, firing, and hiring) or strong demand-side economic growth may not therefore reduce this pool of long-term unemployed.