Does Unemployment Hysteresis Exist in Economy of Iran?
AbstractThis paper aims to investigate the unemployment hysteresis hypothesis for Iran, by using annual data of actual unemployment rate, during period 1959-2011. We first apply traditional methods of unit root test without considering structural breaks such as ADF and Phillips and Perron (1988) tests and fail to reject the hysteresis hypothesis in unemployment time series. When one structural break is incorporated, we again fail to reject hysteresis hypothesis. Since the mentioned tests have little power, we employ unit root tests that consider multiple structural breaks as analysis of the unemployment time series. Our empirical findings are consistent with the hysteresis hypothesis of unemployment.
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Bibliographic InfoArticle provided by Asian Economic and Social Society in its journal International Journal of Asian Social Science.
Volume (Year): 3 (2013)
Issue (Month): 8 (August)
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Postal: Sadeeq Block, Near Fawara Chowk, Abbasia Town, Rahim Yar Khan - 64200, Punjab, Pakistan
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Unemployment; Hysteresis; Unit root tests; Structural breaks;
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