Unit Root Tests on the Level and Rate of Unemployment: Australia, 1960-1997

Victoria Univ. Applied Econ. Working Paper No. 2/00

33 Pages Posted: 10 Nov 2001

See all articles by Laszlo Konya

Laszlo Konya

La Trobe University - School of Economics

Date Written: February 2000

Abstract

The aim of this paper is to analyze the rate and level of Australian unemployment, and also their logarithms, in the period of 1960 to 1997, with special regard to the unit-root versus stationarity hypotheses. Theoretically, the level of unemployment, the rate of unemployment and the logarithm of the unemployment rate cannot be generated by random walk processes. In practice, however, the actual time series at hand might behave similarly to some final segments of unit-root processes, making it impossible to reject the unit root hypothesis at conventional levels of significance. As our analysis shows, the results of unit-root and stationarity tests depend on whether we consider unemployment, the unemployment rate or their logarithms. Moreover, they are very sensitive to the existence of structural changes.

Keywords: Australia, unemployment, unit root

JEL Classification: C12, C22

Suggested Citation

Konya, Laszlo, Unit Root Tests on the Level and Rate of Unemployment: Australia, 1960-1997 (February 2000). Victoria Univ. Applied Econ. Working Paper No. 2/00, Available at SSRN: https://ssrn.com/abstract=290041 or http://dx.doi.org/10.2139/ssrn.290041

Laszlo Konya (Contact Author)

La Trobe University - School of Economics ( email )

Bundoora, Victoria 3086
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
165
Abstract Views
2,395
rank
223,773
PlumX Metrics