Unemployment in Britain: Some more Questions
AbstractRecent time series evidence favouring a supply-side interpretation of long-run unemployment in the UK is based on the finding of cointegration between unemployment and wage pressure variables. We show that this is necessary but not sufficient. The key assumptions in recent work, that a single relation exists between unemployment and wage pressure variables and that the causality is from these variables to unemployment, both appear to be invalid. In the light of this, and evidence of its serious parameter instability, this model of long-run UK unemployment seems flawed.
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Bibliographic InfoPaper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 293.
Date of creation: Apr 2007
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-EEC-2007-08-08 (European Economics)
- NEP-LAB-2007-08-08 (Labour Economics)
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