Hysteresis in Unemployment for Taiwan’s Regional Data: Panel Kss Unit Root Test With a Fourier Function Through the Sequential Panel Selection Method

Li-Hung Wu ()
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Li-Hung Wu: College of Business, Feng Chia University and Department of Accounting and Information Technology, Ling Tung University, Taichung, Taiwan

HOLISTICA Journal of Business and Public Administration, 2015, vol. 6, issue 3, 9-24

Abstract: This study applies the Sequential Panel Selection Method (SPSM) proposed by Chortareas and Kapetanios (2009) to test the validity of hysteresis of unemployment for a sample of Taiwan’s 20 regions semiannual from 1993 to 2012. SPSM classifies the whole panel into a group of stationary countries and a group of non-stationary countries. In so doing, we can clearly identify how many and which series in the panel are stationary processes. We propose a Panel KSS test with a Fourier function for the SPSM in our empirical study, the results of which indicate that natural rate of unemployment holds true for most of the 20 regions studied. Our results have important policy implications for Taiwan’s 20 regions in this study. Classification-JEL:

Keywords: Hysteresis of unemployment; Taiwan’s 20 regions; Sequential Panel Selection Method; Panel KSS Test with a Fourier Function (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:urn:urnste:v:6:y:2015:i:3:p:9-24

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