Unemployment in Greece: evidence from Greek regions

Evangelia Papapetrou and Dimitrios Bakas
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Evangelia Papapetrou: Bank of Greece and University of Athens

No 146, Working Papers from Bank of Greece

Abstract: The purpose of the paper is to examine the nature of Greek unemployment allowing for cross-sectional dependence among Greek regions and for the presence of structural breaks. The paper contributes to the literature assessing the stochastic properties of Greek regional unemployment rates using recently developed and more powerful panel unit-root tests, such as the Lagrange Multiplier (LM) panel unit root test of Im et al. (2010), that allow for level and trend breaks, heterogeneity and cross-sectional dependence in the panel. The results show that in all cases, after taking into account the fact that regional unemployment rates in Greece are subject to a structural break both in mean and the slope of the series, the null hypothesis of a unit root is not rejected, indicating that the Greek regional unemployment series are non-stationary with the presence of a structural break.

Keywords: Unemployment; Hysteresis; Panel unit root tests; Structural breaks; Cross-section dependence (search for similar items in EconPapers)
JEL-codes: C32 C33 E24 J64 R23 (search for similar items in EconPapers)
Pages: 28
Date: 2012-06
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (16)

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