Revisiting Okun's Law: An Hysteretic Perspective
Many developed countries have suffered from high unemployment rates during the last few decades. Beyond the economic and social consequences of this painful experience, the understanding of the mechanisms underlying unemployment still constitutes an important challenge. Focusing on one of its relevant determinants, we reexamine the link between output and unemployment. We show that the difficulty of detecting the close relationship between the two is due to a phenomenon of non-linearity. The asymmetric feature characterizing the data refers to a theory known as hysteresis.
|Date of creation:||01 Aug 2001|
|Date of revision:|
|Contact details of provider:|| Postal: 9500 Gilman Drive, La Jolla, CA 92093-0508|
Phone: (858) 534-3383
Fax: (858) 534-7040
Web page: http://www.escholarship.org/repec/ucsdecon/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kurt Brännäs & Henry Ohlsson, 1999.
"Asymmetric Time Series and Temporal Aggregation,"
The Review of Economics and Statistics,
MIT Press, vol. 81(2), pages 341-344, May.
- L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
- Franz, Wolfgang, 1990.
"Hysteresis in economic relationships: An overview,"
Discussion Papers, Series II
104, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Holly,Sean & Weale,Martin (ed.), 2000. "Econometric Modelling," Cambridge Books, Cambridge University Press, number 9780521650694, 1.
- Granger, Clive W J, 1995. "Modelling Nonlinear Relationships between Extended-Memory Variables," Econometrica, Econometric Society, vol. 63(2), pages 265-79, March.
- Hargreaves Heap, S P, 1980. "Choosing the Wrong 'Natural' Rate: Accelerating Inflation or Decelerating Employment and Growth?," Economic Journal, Royal Economic Society, vol. 90(359), pages 611-20, September.
- Neftci, Salih N, 1984. "Are Economic Time Series Asymmetric over the Business Cycle?," Journal of Political Economy, University of Chicago Press, vol. 92(2), pages 307-28, April.
- Jaeger, Albert & Parkinson, Martin, 1994. "Some evidence on hysteresis in unemployment rates," European Economic Review, Elsevier, vol. 38(2), pages 329-342, February.
- Gordon, Robert J, 1989. "Hysteresis in History: Was There Ever a Phillips Curve?," American Economic Review, American Economic Association, vol. 79(2), pages 220-25, May.
- Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-44, January.
- Budd, Alan & Levine, Paul & Smith, Peter, 1987. "Long-term unemployment and the shifting U-V curve : A multi-country study," European Economic Review, Elsevier, vol. 31(1-2), pages 296-305.
- Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
When requesting a correction, please mention this item's handle: RePEc:cdl:ucsdec:qt2fb7n2wd. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)
If references are entirely missing, you can add them using this form.