The requirement of evaluating a gain over the entire signal space is one of
the restrictions in the traditional small gain theorem. In this paper, a l
ocal form of small gain theorem is presented. It yields a bound on the exte
rnal signal that guarantees that the magnitude of the specified signal alon
g the closed loop stays within a certain region and hence it is useful in a
ddressing the signal magnitude dependent stability problem. The theorem is
used to analyze the feedback properties of a Volterra series system as well
as an inverse (or pseudo inverse) Volterra system. Improvement over existi
ng results is demonstrated, both theoretically and via numerical examples.