Unemployment convergence analysis for Nordic countries: Evidence from linear and nonlinear unit root tests

Burak Güriş (), İpek M. Yurttagüler and Muhammed Tıraşoğlu
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İpek M. Yurttagüler: Istanbul University, Istanbul, Turkey

Theoretical and Applied Economics, 2017, vol. XXIV, issue 1(610), Spring, 45-56

Abstract: The purpose of this study is to analyze the unemployment convergence in the NORDIC countries. The linearity test developed by Harvey et al. (2008) was used, the Sollis (2009) nonlinear unit root test was used for the countries the nonlinearity of which have been identified and the Narayan and Popp (2010) test was used for the series the linearity of which have been identified. As a result of the analysis, it was found out that the unemployment rates in Finland, Norway and Sweden converged to the NORDIC mean whereas the unemployment rates in Denmark and Iceland did not converge to the NORDIC mean. Based on this result, it could be said for Denmark and Iceland that the shocks to unemployment rate differentials are persistent.

Keywords: Convergence; Nonlinear Unit Root Test; Linear Unit Root Test; Linearity; Unemployment Rate. (search for similar items in EconPapers)
Date: 2017
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