 Adjustment Dynamics and the Natural Rate: An Account of UK UnemploymentBrian Henry, Marika Karanassou () and Dennis Snower Oxford Economic Papers, 2000, vol. 52, issue 1, 178-203 Abstract: This paper challenges what is the standard account of UK employment, namely that the major swings in unemployment over the past 25 years are due predominantly to movements in the underlying empirical natural rate of unemployment (NRU). Our analysis suggests that the UK NRU has remained reasonably stable through time and that the medium-run swings in unemployment are due, instead, to very prolonged after-effects of persistent (transitory but long-lasting) shocks. We argue that (i) past UK labour market shocks have prolonged after-effects on unemployment due to interactions among different lagged adjustment processes in the labour market; (ii) many of the important shocks that have hit the UK labour market over the past 25 years have been persistent; and (iii) the persistence of the shocks is complementary to the persistence of the lagged adjustment processes in generating movements of UK employment. Copyright 2000 by Oxford University Press. Date: 2000 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:52:y:2000:i:1:p:178-203 Ordering information: This journal article can be ordered from Access Statistics for this article Oxford Economic Papers is currently edited by James Forder and Francis J. Teal More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. |
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