Unemployment Hysteresis in the Czech Republic

Bechný, Jakub

doi:10.18267/j.pep.709

Cited by 5 publications

(7 citation statements)

References 30 publications

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“…They rejected the unit root hypothesis after controlling for structural changes and business cycle effects in the case of CEE countries. Similar findings have been obtained by Bechný (2019) and Furuoka (2014) for CzechR. In addition, our findings concur with Gozgor (2013) results in the case of 10 CEE countries.…”

Section: Methodology and Empirical Findingssupporting

confidence: 93%

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What do unit root tests tell us about unemployment hysteresis in transition economies?

Akay

Oskonbaeva

Bülbül

2020

AEA

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Purpose This study aims to examine the hysteresis hypothesis in unemployment using monthly data from 13 countries in transition. Design/methodology/approach Stationarity in the unemployment rate of selected transition economies was analyzed using four different group unit root tests, namely, linear, structural breaks, non-linear and structural breaks and non-linear. Findings The empirical results show that the unemployment hysteresis hypothesis is valid for the majority of transition economies, including Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, the Kyrgyz Republic, Latvia, Lithuania, Poland, Romania and Slovenia. However, the results strongly reject the null hypothesis of unemployment hysteresis for the Kazakhstan and the Slovak Republics. Originality/value This study revealed that, for countries in transition, advanced unit root tests exhibit greater validity when compared to standard tests

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Section: Methodology and Empirical Findingssupporting

confidence: 93%

Section: Comparison Of the Unit Root Testssupporting

confidence: 91%

What do unit root tests tell us about unemployment hysteresis in transition economies?

Akay

Oskonbaeva

Bülbül

2020

AEA

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“…In the similar context, NRU transformed into the NAIRU to explain the cyclical component of the aggregate unemployment rate in which the latter hypothesis implies that aggregate demand and monetary policy shocks can induce a change of unemployment from the NAIRU in the short-run (Bechny, 2019). However, as in the case of NRU, the NAIRU hypothesis points out that it converges to the optimal level in the long-run, which is substantially independent of the effects of monetary policies and structural components of the aggregate economy.…”

Section: Hysteresis In Unemployment: Theoretical Underpinningsmentioning

confidence: 99%

Unemployment Hysteresis: Attached or Mismatched?

Özdemir¹

2021

SAEB

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This paper investigates the empirical significance of the unemployment problem whether it is structural or temporary on the basis of region-based, income-based and aggregate classifications of different countries for the yearly data from 1991 to 2018. In the first part of the paper, we examine the stationary position of unemployment series by way of using individual unit-root tests. Since the series are possibly subjected to the structural breaks, we also use additional approaches in which the effects of the break dates are checked in the analysis. Furthermore, we compare the initial findings of univariate unit-root tests along with panel unit-root testing procedures to critically assess the statistical validity of the hysteresis hypothesis in unemployment for given samples. The empirical findings imply that we cannot reject the hysteresis hypothesis for different classifications of the countries against the alternative of a natural rate even in the presence of structural breaks.

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“…V české odborné literatuře se empirickou verifi kací hypotézy hystereze zabýval Bechný (2019b), Němec (2010) či Pošta (2015), přičemž závěry všech zmíněných autorů podporují hypotézu hystereze. Bechný (2019b) konkrétně aplikoval metodologii nepozorovatelných komponent (UC, Unobserved Component), kterou navrhli Jaeger a Parkinson (1994). Po jejich vzoru modeluje hysterezi jako situaci, ve které cyklická složka ekonomické veličiny ovlivňuje její trendovou složku, což je přístup, který bude použit také v tomto článku.…”

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Potential Output and Output Gap in a Period of Economic Crises

Čížků¹

2023

Politicka ekonomie

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Potential Output and Output Gap in a Period of Economic CrisesThe article investigates potential output and output gap modelling and estimation in the Czech Republic in the period 1996-2021, including the global recession from 2008 and the recent crisis caused by government measures against the COVID-19 pandemic. The unobserved components (UC) methodology is applied, coefficients are estimated by the maximum likelihood method, unobserved variables are estimated using the Kalman filter. The standard UC model is modified in an original way to nonlinearly describe the hysteresis effect by allowing the output gap to have an asymmetrical influence on potential output. The econometric model verification proved significance of the hysteresis effect and showed a substantial inertia of negative consequences of both crises. Predictions of an impact of the War in Ukraine on the gap were also calculated and the uncertainty associated with these predictions was quantified.

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Unemployment Hysteresis in the Czech Republic

Cited by 5 publications

References 30 publications

What do unit root tests tell us about unemployment hysteresis in transition economies?

What do unit root tests tell us about unemployment hysteresis in transition economies?

Unemployment Hysteresis: Attached or Mismatched?

Potential Output and Output Gap in a Period of Economic Crises

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