This paper studies the relationship between region-specific shocks in the European labor market and unemployment rates in Europe. The existing empirical literature in this topic employs measures hardly useful to analyze the issue at hand. We use a model for non-stationary evolving distributions to identify disaggregate and aggregate disturbances and analyze their joint dynamics. Our main findings are that unemployment is lower the more alike shocks are across regions and the lower mobility of those regional shocks is. Further, the dynamics of regional shocks have substantial predictive power for aggregate unemployment fluctuations.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number
1998-19.
Find related papers by JEL classification: C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation