Unemployment Hysteresis in Transition Countries: Evidence Using Stationarity Panel Tests with Breaks

16 Pages Posted: 21 Jul 2008

See all articles by Mariam Camarero

Mariam Camarero

Jaume I University - Department of Economics

Josep Lluís Carrion-i-Silvestre

University of Barcelona - Department of Econometrics

Cecilio R. Tamarit

University of Valencia - Department of Applied Economics

Abstract

The authors test hysteresis versus the natural rate hypothesis in unemployment using panel data for transition countries covering the period 1991:12003:11. The advantages of the stationarity tests applied is that they exploit the cross-section variations of the series and, additionally, allow for a different number of endogenous breakpoints in the unemployment series. They do not impose independence on the panel members, so that the critical values are simulated based on their specific panel sizes and time periods. The findings stress the importance of accounting for exogenous shocks in the series and give support to the shifting natural-rate hypothesis of unemployment for all the countries analyzed.

Suggested Citation

Camarero Olivas, María Amparo (Mariam) and Carrion-i-Silvestre, Josep Lluís and Tamarit Escalona, Cecilio R., Unemployment Hysteresis in Transition Countries: Evidence Using Stationarity Panel Tests with Breaks. Review of Development Economics, Vol. 12, Issue 3, pp. 620-635, August 2008. Available at SSRN: https://ssrn.com/abstract=1163372 or http://dx.doi.org/10.1111/j.1467-9361.2008.00476.x

María Amparo (Mariam) Camarero Olivas (Contact Author)

Jaume I University - Department of Economics ( email )

Campus del Riu Sec.
E-12071 Castellon
Spain

Josep Lluís Carrion-i-Silvestre

University of Barcelona - Department of Econometrics ( email )

Av. Diagonal 690
Barcelona, E-08034
Spain

Cecilio R. Tamarit Escalona

University of Valencia - Department of Applied Economics ( email )

4F04 Edificio Departamental Oriental
P.O. Box 22.006
Valencia, 33006
Spain
+34-963828349 (Phone)
+34-963828354 (Fax)

HOME PAGE: http://www.uv.ed/~tamac/

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