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Bring Quantile Unit Root Test back in Testing Hysteresis in Unemployment for the United States

Author

Listed:
  • Jiang, Yushi

    (School of Economic & Management, Southwest Jiaotong University, Chendo, China)

  • Chang, Tsangyao

    (Department of Finance, Feng Chia University, Taichung, Taiwan)

Abstract

We apply quantile unit root test to revisit the hysteresis in unemployment for the United States using data over 1928-2014. Conventional unit root tests indicate that hysteresis in unemployment does not hold in the United States over 1928-2014. Quantile Kolmogorov-Smirnov test also reject the hysteresis in unemployment hypothesis However, empirical results from quantile unit root test indicate that hysteresis in unemployment hold in both 0.3 and 0.4 quantiles. These empirical results are different from previous findings and have important policy implications for government to conduct economic stabilization policy in the United States.

Suggested Citation

  • Jiang, Yushi & Chang, Tsangyao, 2016. "Bring Quantile Unit Root Test back in Testing Hysteresis in Unemployment for the United States," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-13, March.
    • Handle: RePEc:rjr:romjef:v::y:2016:i:1:p:5-13
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    References listed on IDEAS

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    1. Cheng, Shu-Ching & Wu, Tsung-pao & Lee, Kuei-Chiu & Chang, Tsangyao, 2014. "Flexible Fourier unit root test of unemployment for PIIGS countries," Economic Modelling, Elsevier, vol. 36(C), pages 142-148.
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    Cited by:

    1. Saša Obradoviæ & Lela Ristiæ & Nemanja Lojanica, 2018. "Are unemployment rates stationary for SEE10 countries? Evidence from linear and nonlinear dynamics," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 559-583.

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    More about this item

    Keywords

    quantile unit root test; hysteresis in unemployment; the United States; stabilization policy;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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