A Reinvestigation of the Hysteresis Hypothesis in the OECD Countries
Additional contact information
Melis Tartici: Ankara, Turkey.
Econometrics Letters, 2015, vol. 2, issue 1, 22-40
This study re-investigates the hysteresis hypothesis in unemployment for 24 OECD countries. The results obtained in the literature are quite mixed for the OECD countries, with the findings highly sensitive to the econometric methodology applied and data used. Therefore, to shed some light on this debate in addition to the conventional unit root tests, a variety of other tests that allow for asymmetric adjustment, structural breaks or both simultaneously are also considered. Our results show that the hysteresis effect in unemployment was confirmed for most of the countries studied according to all tests applied. Thus, the labor markets of the OECD countries calls for urgent reform, especially if they want their jobless rates to return to their pre 2008-2009 global financial crisis levels.
Keywords: Hysteresis in unemployment; Nonlinear unit root test; Unit root test with structural break; Unit root test with both structural break and asymmetric nonlinearity. (search for similar items in EconPapers)
JEL-codes: C22 C23 J64 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://econometricsletters.com/wp-content/uploads/ ... -T-Vol-2-Issue-1.pdf
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bmo:bmoart:v:2:y:2015:i:1:p:22-40
Access Statistics for this article
More articles in Econometrics Letters from Bilimsel Mektuplar Organizasyonu (Scientific letters)
Series data maintained by Tolga Omay ().