Testing for Hysteresis in Unemployment in OECD Countries: New Evidence Using Stationarity Panel Tests with Breaks

16 Pages Posted: 8 May 2006

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

This paper tests hysteresis effects in unemployment using panel data for 19 Organization for Economic Co-operation and Development (OECD) countries covering the period 1956-2001. The tests exploit the cross-sectional variations of the series, and additionally, allow for a different number of endogenous breakpoints in the unemployment series. The critical values are simulated based on our specific panel sizes and time periods. The findings stress the importance of accounting for exogenous shocks in the series and support the natural-rate hypothesis of unemployment for the majority of the countries analysed.

Suggested Citation

Camarero Olivas, María Amparo (Mariam) and Carrion-i-Silvestre, Josep Lluís and Tamarit Escalona, Cecilio R., Testing for Hysteresis in Unemployment in OECD Countries: New Evidence Using Stationarity Panel Tests with Breaks. Oxford Bulletin of Economics & Statistics, Vol. 68, No. 2, pp. 167-182, April 2006. Available at SSRN: https://ssrn.com/abstract=889816 or http://dx.doi.org/10.1111/j.1468-0084.2006.00157.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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