Kocherlakota (2014) -expressing agreement with Hall's view -- notes that much of the hysteresis can be reversed ultimately, referring to the fact that hysteresis resulting from the Great Depression was eliminated under vigorous demand during World War II. 11  Second, it is also necessary to pay due attention to the stability of the financial system.
In an environment where accommodative financial conditions have been maintained over a long period, the risk of an accumulation of financial imbalances will be heightened.