Unemployment Persistence: Does the Size of the Shock Matter?

Gylfi Zoega

No 1082, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper is an empirical investigation of unemployment rate series in 17 countries. The timing and size of shifts in the mean rate of unemployment are estimated. The size of the shifts and the remaining persistence in the unemployment rate series are then related to institutional differences between the countries. The observed persistence in the unemployment hysteresis arises following large shocks to unemployment, but not following small changes. These results pose a challenge to theorists since none of the existing models of hysteresis have this property.

Keywords: Equilibrium Unemployment; Hysteresis; Macroeconomic Policy; Shifting Mean Value Model; World Unemployment (search for similar items in EconPapers)
JEL-codes: C22 L24 L32 (search for similar items in EconPapers)
Date: 1994-12
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Unemployment persistence: does the size of the shock matter? (1998)
Working Paper: Unemployment persistence: Does the size of the shock matter? (1996)
Working Paper: Unemployment Persistence: Does the Size of the Shock Matter ? (1995)
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