Testing Hysteresis in Unemployment in G7 Countries Using Quantile Unit Root Test with both Sharp Shifts and Smooth Breaks

Abstract

We apply a Quantile unit root test with both Sharp Shifts and Smooth Breaks to revisit hysteresis in unemployment for G7 countries using data for the period 1980-2017. Results from the conventional unit root tests indicate that hysteresis in unemployment does hold in half of these G7 countries during the period 1980-2017. A quantile Kolmogorov-Smirnov test fails to reject hysteresis in the unemployment hypothesis for our quarterly data but not in monthly data in G7 countries. Empirical results from our proposed quantile unit root test considering both sharp shifts and smooth breaks indicate that hysteresis in unemployment can be rejected over certain quantiles. A quantile Kolmogorov-Smirnov test results demonstrating hysteresis in unemployment does not hold in G7 countries for both monthly and quarterly data. These empirical findings have important policy implications in G7 countries.

Hysteresis of unemployment rates in Africa: new findings from Fourier ADF test

“…As a consequence, more unit root testing frameworks have been considered to ascertain the true stationarity stance of unemployment rate. These include Levin and Lin (1992) and Im et al (1997) panel-based unit root tests (see Song and Wu, 1998;Leon-Ledesma, 2002 Empirically, the hysteresis hypothesis of unemployment rate has however been examined for diverse regions, which include Spanish regions (Garcia-Cintado, Romero-Avila and Usabiaga, 2015); Nordic countries (Furuoka, 2017a,b); OECD member countries (Meng, Strazicich and Lee, 2017;Khraief and Azam, 2018); G7 countries (Jiang, Cai, Peng and Chang, 2018); Turkey (Guris, Tiftikcigil and Tirasoglu, 2017); European countries with US and Japan (Akdogan, 2017); Eastern European countries (Xie, Chang, Grigorescu and Hung, 2018); specific categorization of five high debt countries -Portugal, Ireland, Italy, Greece and Spain (Li, Ranjbar and Chang, 2017); eleven African countries -Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, South Africa, Tanzania and Zambia (Caporale and Gil-Alana, 2018a); among others.…”

Danimarka ve İsveç İçin İşsizlik Histerisi Hipotezinin Test Edilmesi

“…The study of Blanchard and Summers (1986) is at the forefront of the empirical studies on unemployment hysteresis. Apart from this study, other examined empirical studies are as follows: Brunello (1990), Neudorfer et al (1990), Jaeger and Parkinson (1994), Røed (1996), Song and Wu (1997), Arestis and Mariscal (1999), Papell et al (2000), León-Ledesma (2002), Camarero and Tamarit (2004), Camarero et al (2006), Gustavsson and Österholm (2006), Camarero et al (2008), Gomes and Da Silva (2008), Lee and Chang (2008), Lee et al (2009), Lee (2010), Chang (2011), Ayala et al (2012), Cevik and Dibooglu (2013), Lee et al (2013), Bakas and Papapetrou (2014), Cheng et al (2014), Furuoka (2014), Tiwari (2014), Jiang and Chang (2016), Akdoğan (2017), Güriş et al (2017), Meng et al (2017), Bahmani-Oskooee et al (2018), Rodriguez-Gil (2018), Yaya et al (2019), Khraief et al (2020), Omay et al (2020), Yilanci et al (2020), Omay et al (2021), Bostancı and Koç (2022), Caporale et al (2022),…”

G-7 Ülkeleri̇nde İşsi̇zli̇k Hi̇steri̇si̇ İçi̇n Bi̇r Anali̇z

“…İşsizlik oranı üzerinde histeri etkisinin olup olmadığına yönelik literatürde ulaşılan sonuçlar, araştırmacıların ele aldıkları ülke veya ülke gruplarına, araştırmada kullanılan zaman dilimine, ele alınan değişkenlere ve kullanılan ampirik metodolojiye bağlı olarak farkı sonuçlara verebilmektedir (bkz. Jiang et al, 2019;Lee & Chang, 2008;Jiang & Chang, 2016;Guichard & Rusticelli, 2010;Marques et al, 2017;Camarero & Tamarit, 2004;Chang, 2011Camarero et al, 2006.…”