Structural Unemployment and the Output Gap in Germany: Evidence from an SVAR Analysis within a Hysteresis Framework
Ulrich Fritsche () and
No 312, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
The German unemployment rate shows strong signs if non-stationarity over the course of the previous decades. This is in line with an insider-outsider model under full hysteresis. We applied a "theory-guided view" to the data using the structural VAR model as developed by Balmaseda, Dolado and López-Salido (2000) allowing for full hysteresis on the labour market. Our identification of the model implies long-lasting output gaps for Germany - especially for the disinflation period of the 1980s.
Keywords: Structural unemployment; output gap; structural VAR; insider-outsider model (search for similar items in EconPapers)
JEL-codes: E12 E32 J64 C32 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp312
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