Ratchet Effect

Business, Legal & Accounting Glossary

Definition: Ratchet Effect


Ratchet Effect


Full Definition of Ratchet Effect


The implication for a variable that (like a ratchet) can move one direction but not the other. Thus if wages or prices are are inflexible downward but not upward, then fluctuations in the economy will only cause them, intermittently, to rise.


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, from PayrollHeaven.com website: https://payrollheaven.com/define/ratchet-effect/

Definition Sources


Definitions for Ratchet Effect are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 16th November, 2021 | 0 Views.