The Asian Financial Crisis and the Natural Rate of Unemployment: Estimates from a Structural VAR for the Newly Industrializing Economies of Asia
University of Western Australia - Department of Economics
Sam Hak Kan Tang
Chinese University of Hong Kong (CUHK) - Department of Economics
Pacific Economic Review, Vol. 9, No. 1, pp. 45-64, February 2004
We use a structural vector autoregressive model to estimate the natural rate of unemployment for Hong Kong, Korea, Singapore and Taiwan for the period 1982-2000. Our results show that the dramatic rise in the unemployment rate observed in Hong Kong and Korea was mainly the result of demand shocks rather than structural changes, while in Singapore the unemployment rate rise reflected almost entirely a rise in the natural rate. Taiwan's natural rate has been relatively stable. We offer explanations for these different results in terms of the different economic characteristics (particularly labor market features) of the four countries.
Number of Pages in PDF File: 20Accepted Paper Series
Date posted: April 26, 2004
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