PANIC Analysis of Spanish Regional Unemployment

Alejandro García-Cintado (), Diego Romero-Ávila () and Carlos Usabiaga
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Alejandro García-Cintado: Pablo de Olavide University
Diego Romero-Ávila: Pablo de Olavide University

Chapter Chapter 2 in Spanish Regional Unemployment, 2014, pp 9-21 from Springer

Abstract: Abstract This chapter investigates the time series properties of the unemployment rate of the Spanish regions over the period 1976–2011. For that purpose, we employ the PANIC procedures of Bai and Ng (2004), which allows us to decompose the observed unemployment rate series into common factor and idiosyncratic components. This enables us to identify the exact source behind the hysteretic behaviour found in Spanish regional unemployment. Overall, our analysis with three different proxies for the excess of labour supply renders strong support for the hysteresis hypothesis, which appears to be caused by a common stochastic trend driving all the regional unemployment series.

Keywords: Unemployment rate; Persistence; PANIC analysis; Common factor (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-3-319-03686-1_2

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DOI: 10.1007/978-3-319-03686-1_2

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