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Testing for Unemployment Hysteresis in Selected Transition Economies

Journal Transition Studies Review

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Field Value
 
Title Testing for Unemployment Hysteresis in Selected Transition Economies
 
Creator Munir, Qaiser
Ching, Kok Sook
Furuoka, Fumitaka
Harvey, Hanafiah
 
Subject Hysteresis - Unemployment rate - Panel stationarity tests Cross-sectional dependence
B23 - C12 - C2
 
Description This study aims to examine the hysteresis hypothesis in unemployment using panel data of 11 Asian countries covering the period 1980-2012. We employ the second generation panel unit root tests recently advanced by Smith et al. (2004). These tests have an advantage as they are able to exploit the cross-section variations of the series. This study provides strong empirical evidence against the hysteresis hypothesis in unemployment for the Asian countries. Finding shows that the unemployment rates of these countries have a tendency for meanreverting. As such, an increase in the unemployment rates is most likely only temporary. Hence, policy makers may not require short-run policies to curb the problem of rising unemployment. Instead, they may consider to pursue long-run strategies for strengthening the fundamental of the domestic labour markets. More importantly, the finding suggests that these countries will benefit from having a wider choice of fiscal and monetary policies as the polices may not result in the long-run negative impact on the unemployment rates.
 
Publisher Journal Transition Studies Review
 
Date 2015-08-17
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://transitionacademiapress.org/jtsr/article/view/30
10.14665/1614-4007-22-1-007
 
Source Journal Transition Studies Review; Vol 22, No 1 (2015); 103-120
1614-4015
1614-4007
 
Language eng
 
Relation http://transitionacademiapress.org/jtsr/article/view/30/8
 
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