 The Dynamics of Unemployment in Poland from 1992 to 2017Gospodarka Narodowa. The Polish Journal of Economics, 2019, issue 1, 135-149 Abstract: Two alternative approaches can be found in the literature on the dynamics of unemployment. The first approach is based on the theory of a natural rate of unemployment. Under this theory, the economy can depart from the natural rate of unemployment in the short term due to nominal shocks, but in the long term the economy is expected to achieve an equilibrium indicated by the natural rate of unemployment. The second approach to the dynamics of unemployment is the so-called hysteresis of unemployment theory. According to this theory, all shocks to unemployment will have a permanent effect on the natural rate of unemployment. In a statistical sense, these two theories boil down to testing the unit root. If the unemployment rate is a non-stationary series with a unit root, then the hysteresis-in-unemployment hypothesis has to be accepted. On the other hand, if the unemployment rate is a stationary series then the hysteresis hypothesis is rejected in favour of the natural rate theory. Keywords: unemployment; hysteresis; threshold autoregression model; unit root tests (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sgh:gosnar:y:2019:i:1:p:135-149 Access Statistics for this article Gospodarka Narodowa. The Polish Journal of Economics is currently edited by Marek Gruszczyński, Grzegorz Konat More articles in Gospodarka Narodowa. The Polish Journal of Economics from Warsaw School of Economics Contact information at EDIRC. |
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