Unemployment dynamics and NAIRU estimates for CEECs: A univariate approach

Mariam Camarero, Josep Carrion-i-Silvestre and Cecilio Tamarit

No 131, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: In this paper we test for the hysteresis versus the natural rate hypothesis on the unemployment rates of the EU new members using unit root tests that account for the presence of level shifts. As a by product, the analysis proceeds to the estimation of a NAIRU measure from a univariate point of view. The paper also focuses on the precision of these NAIRU estimates studying the two sources of inaccuracy that derive from the break points estimation and the autoregressive parameters estimation. The results point to the existence of up to four structural breaks in the transition countries NAIRU that can be associated with institutional changes 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.

JEL-codes: C22 C23 E24 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2005
New Economics Papers: this item is included in nep-ecm, nep-lab, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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