The recency effect is found when the results of a free recall task are plotted in the form of a serial position curve. Generally, this curve is U-shaped, and the recency effect corresponds to the tail of the U on the right. This tail indicates that words presented at the end of a list of to-be-remembered items are better remembered than words presented in the middle of this list. It is called the recency effect because these items were the ones presented most recently to the subject in the memory experiment.
The recency effect appears to be the result of subjects recalling items directly from the maintenance rehearsal loop used to keep items in primary memory. In other words, it reflects short-term memory for items. This is because the recency effect can be sharply attenuated by performing manipulations that adversely affect such rehearsal -- such as delaying recall of list items with a distractor task, or by using list items that have similar sounds.
The recency effect was important to cognitive science because it provided empirical evidence for the decomposition of memory into an organized set of subsystems, which is required by functional analysis.