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Population–Employment Models: Stationarity, Cointegration, and Dynamic Adjustment

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  • Gary L. Hunt

Abstract

. Population and employment in the 50 United States are found to be non‐stationary and cointegrated. Vector error correction (VEC) models exhibit dynamics with adjustment to shocks essentially completed in 30–35 years. This contrasts with adjustment periods between one and two centuries for non‐stationary models specified in levels. These dynamic adjustment patterns support the hypothesis that relatively long adjustment periods and slow dynamics are probably the spurious results of using non‐stationary levels of population and employment outside of a VEC model framework. Recommendations for modeling the population–employment relationship are offered based on the findings reported.

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  • Gary L. Hunt, 2006. "Population–Employment Models: Stationarity, Cointegration, and Dynamic Adjustment," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 205-244, May.
    • Handle: RePEc:bla:jregsc:v:46:y:2006:i:2:p:205-244
    DOI: 10.1111/j.0022-4146.2006.00439.x
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    References listed on IDEAS

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    1. Engle, R. F. & Granger, C. W. J. (ed.), 1991. "Long-Run Economic Relationships: Readings in Cointegration," OUP Catalogue, Oxford University Press, number 9780198283393.
    2. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
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    3. Shu-hen Chiang, 2018. "Assessing the Merits of the Urban-Led Policy in China: Spread or Backwash Effect?," Sustainability, MDPI, vol. 10(2), pages 1-14, February.
    4. Timothy J. Bartik, 2015. "How Effects of Local Labor Demand Shocks Vary with the Initial Local Unemployment Rate," Growth and Change, Wiley Blackwell, vol. 46(4), pages 529-557, December.
    5. Deller, Steven & Lledo, Victor, 2007. "Amenities and Rural Appalachia Economic Growth," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(1), pages 107-132, April.
    6. repec:rre:publsh:v:40:y:2010:i:1:p:71-97 is not listed on IDEAS
    7. Robert Dixon & Guay Lim, 2016. "Modelling the dynamics of regional employment–population ratios and their commonality," Urban Studies, Urban Studies Journal Limited, vol. 53(2), pages 338-354, February.
    8. Shu-Hen Chiang, 2014. "The dilemma of "Twin Cities": is the suburban dependence hypothesis applicable?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 17(2), pages 149-163, June.
    9. Stilianos Alexiadis & Konstantinos Eleftheriou & Peter Nijkamp, 2013. "Do Income Disparities dissipate across the US States? Experimenting with a Vector Error Correction Model," Tinbergen Institute Discussion Papers 13-165/VIII, Tinbergen Institute.
    10. Fabian Waltert & Felix Schlaepfer, 2007. "The role of landscape amenities in regional development: a survey of migration, regional economic and hedonic pricing studies," SOI - Working Papers 0710, Socioeconomic Institute - University of Zurich.

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