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Seasonal Adjustment and Business Cycle in Unemployment

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Author Info
Franses, Ph.H.B.F.
Bruin, P.T.de.

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Abstract

Several recent studies show that seasonal variation and cyclical variation in unemployment are correlated. A common finding is that seasonality tends to differ across the business cycle stages of recessions and expansions. Since seasonal adjustment methods assume that the two sources of variation can somehow be separated, the present study examines the impact of seasonal adjustment on the analysis of cyclical patterns. Seasonally adjusted quarterly unemployment data for 5 G-7 countries are modeled by a Smooth Transition Autoregression [STAR] while the corresponding unadjusted data are modeled by a so-called Seasonal STAR [SEASTAR]. A comparison of the implied estimated peaks and troughs shows that there is substantial agreement on the business cycle chronologies, albeit that for seasonally adjusted data recessionary periods tend to last longer.

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Publisher Info
Paper provided by Erasmus University of Rotterdam - Econometric Institute in its series Papers with number 9923/a.

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Length: 19 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:erroem:9923/a

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Related research
Keywords: UNEMPLOYMENT SEASONALITY BUSINESS CYCLES

Find related papers by JEL classification:
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution

Cited by:
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  1. Siem Jan Koopman & Kai Ming Lee, 2008. "Seasonality with Trend and Cycle Interactions in Unobserved Components Models," Tinbergen Institute Discussion Papers 08-028/4, Tinbergen Institute. [Downloadable!]
Statistics
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This page was last updated on 2008-7-2.


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