 Nonlinear vs. nonstationary of hysteresis in unemployment: evidence from OECD economiesCheng-Hsun Lin, Nai-Fong Kuo and Cheng-Da Yuan Applied Economics Letters, 2008, vol. 15, issue 11, 905-909 Abstract: This study examines the lower and higher boundaries for the threshold value to be considered an indicator of unemployment in a specific country. Specially, the objective is to conduct the critical moment of hysteresis effects happening in unemployment rate using a group of 16 OECD countries. The methodological strategy applies a developed tool of threshold tests involving unit root against stationary but nonlinear alternative by Caner and Hansen (2001). A significant contribution of this study is identifying a trigger point from the nonstationary of time series process for the first time in the literature. Our empirical results finds strong evidence of the existence of nonlinear stationary in Australia, Canada, Finland, France, Germany, Ireland, Japan, Netherlands and the USA when the threshold effect holds. The hysteresis hypothesis is further confirmed by the fact that the unemployment rate exceeds the boundaries of the band, for Australia, Finland, France, Germany, Japan and the USA when the threshold unit root test of Caner and Hansen is rigorously implemented. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:15:y:2008:i:11:p:905-909 Ordering information: This journal article can be ordered from DOI: 10.1080/13504850600949145 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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