Webpack/babel bundling outdated code for local linked packages after first run

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When trying to develop a library, npm link and npm link [libaryname] can be used to connect local packages for debugging.

For some reason when using it with the webpack dev server, it does not update the consumed package in the consumer project. The first time the project is run, it correctly imports the linked package. On subsequent runs the imported module stays the same as it was the first time it was run, despite the code of the package in node_modules being correct and up to date. It never changes from its initial state on the first run, even when removing and re-installing the referenced package.

Is there some caching mechanism at work that can be disabled? If not, where does webpack get the outdated sources from?

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