Article ID Journal Published Year Pages File Type
9554466 Journal of Comparative Economics 2005 20 Pages PDF
Abstract
In this paper we test for hysteresis effects versus the natural rate hypothesis on unemployment rates of new members in the European Union (EU) using unit root tests that account for the presence of level shifts. In addition, we estimate the non-accelerating inflation rate of unemployment (NAIRU) from a univariate perspective. The precision of these NAIRU are investigated by studying two sources of inaccuracy that derive from the estimation of the break points, and the estimation of the autoregressive parameters. The results indicate up to four structural breaks in the NAIRU of transition countries that can be associated with institutional changes from implementing market-oriented reforms. Moreover, the degree of persistence in unemployment varies dramatically among the individual countries depending on the stage reached in the transition process and the institutional setting in the labor market. Journal of Comparative Economics33 (3) (2005) 584-603.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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