Are unemployment rates stationary for SEE10 countries? Evidence from linear and nonlinear dynamics
Saša Obradović (),
Lela Ristić () and
Nemanja Lojanica ()
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Saša Obradović: University of Kragujevac – Faculty of Economics, Djure Pucara 3, 34000 Kragujevac, Serbia. Street, 300115 Timisoara, Romania.
Lela Ristić: University of Kragujevac – Faculty of Economics, Djure Pucara 3, 34000 Kragujevac, Serbia.
Nemanja Lojanica: University of Kragujevac – Faculty of Economics, Djure Pucara 3, 34000 Kragujevac, Serbia.
Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, 2018, vol. 36, issue 2, 559-583
This article aims to answer the questions concerning the dynamics of unemployment rates, including whether there is a subsequent hysteresis in the selected sample of ten countries of the South East Europe. The linear and nonlinear tests have been used to determine the stationarity of unemployment rates. The findings show that in eight out of ten countries, unemployment is a stationary process which implies that the hysteresis hypothesis has not been confirmed. The unemployment rates in Albania, Bulgaria, Slovenia, Croatia, Romania, Greece, Montenegro and Turkey manifest mean reverting behaviour. The movements of unemployment rates in the next period can be forecasted with a relatively high degree of certainty in terms of the mentioned countries. The unemployment in FYR Macedonia and Serbia is a non-stationary process. The results further emphasize the importance of allowing asymmetric adjustment and structural breaks, especially in the case of Romania, Montenegro and Turkey.
Keywords: hysteresis; unemployment rate; non-linearity; stationarity and unit root (search for similar items in EconPapers)
JEL-codes: J08 J21 J64 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:rfe:zbefri:v:36:y:2018:i:2:p:559-583
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