What goes up sometimes stays up: shocks and institutions as determinants of unemployment persistence
Gianni Amisano and
Massimiliano Serati ()
Scottish Journal of Political Economy, 2003, vol. 50, issue 4, pages 440-470
We analyse the determinants of unemployment persistence in four OECD countries by estimating a structural Bayesian VAR with an informative prior based on an insiders/outsiders model. We explicitly insert unemployment benefits and labour taxes so that our identification is not affected by the Faust and Leeper (1997) critique. We find widespread hysteresis: demand shocks play a dominant role in explaining unemployment also in the medium-run. Moreover real wages have low sensitivity to cyclical fluctuations and to labour market disequilibria. Our results emphasise the real power of the unions and their interactions with structural shocks and other institutions as crucial determinants of hysteresis. Copyright (c) Scottish Economic Society 2003.
References: Add references at CitEc
Citations View citations in EconPapers (10) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=2003&part=null link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: What goes up sometimes stays up: shocks and institutions as determinants of unemployment persistence (2002)
Working Paper: What goes up sometimes stays up: Shocks and Institutions as Determinants of Unemployment Persistence (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:scotjp:v:50:y:2003:i:4:p:440-470
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292
Access Statistics for this article
Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith
More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().