Journal article
Decoding unemployment persistence: an econometric framework for identifying and comparing the sources of persistence with an application to UK macrodata
Energy Economics and Regulation, Sustainability, Department of Technology, Management and Economics, Technical University of Denmark1
Sustainability, Department of Technology, Management and Economics, Technical University of Denmark2
Department of Technology, Management and Economics, Technical University of Denmark3
Most econometric analyses of persistence focus on the existence of non-stationary unemployment but not the origin of this. The present research contains a multivariate econometric framework for identifying and comparing different sources of unemployment persistence (e.g., slow adjustment versus a slowly moving equilibrium rate).
The framework contains readily applicable formulas for testing different hypotheses of persistence and is used to identify the causes of this in the UK macroeconomy. The evidence suggests that persistence has been due to a slowly moving equilibrium, driven by the price of crude oil, and not to slow adjustment, for example as related to the process of wage formation, as has often been emphasized.
Language: | English |
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Publisher: | Springer Berlin Heidelberg |
Year: | 2019 |
Pages: | 1489-1514 |
Journal subtitle: | Journal of the Institute for Advanced Studies, Vienna, Austria |
ISSN: | 14358921 and 03777332 |
Types: | Journal article |
DOI: | 10.1007/s00181-017-1400-9 |
ORCIDs: | Møller, Niels Framroze |