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A note on the macroeconomic modelling of unemployment hysteresis

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  • Knut Roed

Abstract

In macroeconomics, unemployment hysteresis typically arises as a special case of an otherwise stationary model. Imposing hysteresis is often equivalent to imposing a random walk, i.e. a situation in which the permanent fraction of a shock is equal to unity. This paper develops a more general linear model of unemployment hysteresis in which permanency is viewed as a continuous, rather than a discrete, phenomenon. Stationarity arises as a special case.

Suggested Citation

  • Knut Roed, 1999. "A note on the macroeconomic modelling of unemployment hysteresis," Applied Economics Letters, Taylor & Francis Journals, vol. 6(4), pages 255-258.
    • Handle: RePEc:taf:apeclt:v:6:y:1999:i:4:p:255-258
    DOI: 10.1080/135048599353465
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    References listed on IDEAS

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    1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    2. Jaeger, Albert & Parkinson, Martin, 1994. "Some evidence on hysteresis in unemployment rates," European Economic Review, Elsevier, vol. 38(2), pages 329-342, February.
    3. Roed, Knut, 1996. "Unemployment Hysteresis--Macro Evidence from 16 OECD Countries," Empirical Economics, Springer, vol. 21(4), pages 589-600.
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    Cited by:

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    2. Luis Alberiko Gil-Alana & Pedro Garcia-del-Barrio, 2006. "New Revelations about Unemployment Persistence in Spain," Faculty Working Papers 10/06, School of Economics and Business Administration, University of Navarra.

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