Common Trends Analysis of Danish Unemployment

Henrik Hansen and Anders Warne

No 95-03, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: We study the Danish unemployment experience 1905-92 using a multivariate common trends model with cointegration constraints. To interpret the empirical results we analyse a simple macroeconomic model of the labor market. The empirical results indicate that there are three cointegration relations and two common trends among the five variables we examine, and the economic model suggests that the trends are due to technology and labor supply. Moreover, Danish unemployment appears to be nonstationary. Based on the identifying assumption of constant returns to scale in production, from the empirical common trends analysis we find that shocks to labor supply is the source behind hysteresis in unemployment.

Keywords: cointegration; identification; structural parameters; supply and demand shocks (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1995-04
References: Add references at CitEc
Citations: View citations in EconPapers (3)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9503

Access Statistics for this paper

More papers in Discussion Papers from University of Copenhagen. Department of Economics Oester Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann ().