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Nonlinear evidence on the existence of jobless recoveries

Author

Listed:
  • Bradley Michael D.

    (The George Washington University, Department of Economics, Washington, DC 20052, United States of America)

  • Jansen Dennis W.

    (Department of Economics, Texas A&M University, College Station, TX 77843, USA)

Abstract

The sluggish growth in employment following the Great Recession has spurred research into investigating its cause. Economists are split as to whether it reflects the advent of “jobless recoveries” or just reflects “slow recoveries” in which both output and employment are slow to recover. We estimate a version of Friedman’s plucking model to investigate this issue. We find evidence suggesting that employment does have its own dynamic response after a recession. Some of the slow growth in employment can be ascribed to the slow output growth, but there is a remaining portion which is consistent with the jobless recovery hypothesis. We then produce evidence relative to four different hypothesis of why jobless recoveries have occurred.

Suggested Citation

  • Bradley Michael D. & Jansen Dennis W., 2018. "Nonlinear evidence on the existence of jobless recoveries," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 22(1), pages 1-19, February.
    • Handle: RePEc:bpj:sndecm:v:22:y:2018:i:1:p:19:n:3
    DOI: 10.1515/snde-2016-0081
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    References listed on IDEAS

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    1. Guillermo Calvo & Fabrizio Coricelli & Pablo Ottonello, 2014. "Jobless Recoveries during Financial Crises: Is Inflation the Way Out?," Central Banking, Analysis, and Economic Policies Book Series, in: Sofía Bauducco & Lawrence Christiano & Claudio Raddatz (ed.),Macroeconomic and Financial Stability: challenges for Monetary Policy, edition 1, volume 19, chapter 11, pages 331-381, Central Bank of Chile.
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    9. Nadal De Simone, Francisco & Clarke, Sean, 2007. "Asymmetry in business fluctuations: International evidence on Friedman's plucking model," Journal of International Money and Finance, Elsevier, vol. 26(1), pages 64-85, February.
    10. Chang‐Jin Kim & James Morley & Jeremy Piger, 2005. "Nonlinearity and the permanent effects of recessions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 291-309.
    11. Bradley Michael D. & Jansen Dennis W., 2000. "Are Business Cycle Dynamics the Same across Countries? Testing Linearity around the Globe," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 4(2), pages 1-23, July.
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    Cited by:

    1. Panovska, Irina & Zhang, Licheng, 2024. "Jobless recoveries and time variation in labor markets," Journal of Macroeconomics, Elsevier, vol. 81(C).
    2. Elroukh, Ahmed W. & Nikolsko-Rzhevskyy, Alex & Panovska, Irina, 2020. "A look at jobless recoveries in G7 countries," Journal of Macroeconomics, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    asymmetric; business cycles; employment; nonlinear;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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