A tendency for a variable to be influenced by its own largest previous value. For example, consumption from any given income may be higher, the higher the previous peak income; or the real wages demanded by trade unions may be an increasing function of the highest real wage previously attained. The ratchet effect implies that variables are more sticky in one direction than the other. A ratchet effect may make inflation hard to stop, if varying speeds of adjustment have led to a situation where the sum of past peak real incomes of all sections of the community is considerably greater than the present total available.

• order-driven market
• order of integration
• orders, new
• ordinal utility
• ordinary least squares
• ordinary share
• organizational slack
• Organization for Economic Cooperation and Development
• Organization of Petroleum Exporting Countries
• organized labour
• organized sector
• origin
• oscillation
• oscillatory function
• other things being equal
• outcry, open
• outflow, capital
• outlier
• output
• output-capital ratio
• output effect
• output-input
• output method
• output per hour worked
• output per manhour