A smooth-transition model of the Australian unemployment rate
Models of the aggregate unemployment rate have traditionally been estimated from structural models of the labour market or in a linear single-equation framework. However, theory as well as evidence suggest that the unemployment rate is asymmetric and should be modelled in a non-linear framework. In this paper the unemployment rate in Australia is modelled as a non-linear function of aggregate demand and real wages. Negative changes in aggregate demand cause the unemployment rate to rise rapidly, while real wage rigidity contributes its to slow adjustment back towards a lower level of unemployment. The model is developed by exploiting recent developments in automated model-selection procedures.
|Date of creation:||22 May 2002|
|Date of revision:||01 Jul 2003|
|Contact details of provider:|| Postal: 7491 Trondheim|
Phone: 73 59 19 40
Fax: 73 59 69 54
Web page: http://www.svt.ntnu.no/iso/WP/wp.htm
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.:
- Philip Rothman, 1998.
"Forecasting Asymmetric Unemployment Rates,"
The Review of Economics and Statistics,
MIT Press, vol. 80(1), pages 164-168, February.
- Guy Debelle & James Vickery, 1998. "The Macroeconomics of Australian Unemployment," RBA Annual Conference Volume, in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- Brannas, K. & Ohlsson, H., 1995.
"Asymmetric Cycles and Temporal Aggregation,"
1995-11, Uppsala - Working Paper Series.
- Le, Anh T & Miller, Paul W, 2000.
"Australia's Unemployment Problem,"
The Economic Record,
The Economic Society of Australia, vol. 76(232), pages 74-104, March.
- Robert B. Davies, 2002. "Hypothesis testing when a nuisance parameter is present only under the alternative: Linear model case," Biometrika, Biometrika Trust, vol. 89(2), pages 484-489, June.
- Eitrheim, Øyvind & Teräsvirta, Timo, 1995.
"Testing the Adequacy of Smooth Transition Autoregressive Models,"
SSE/EFI Working Paper Series in Economics and Finance
56, Stockholm School of Economics.
- Eitrheim, Oyvind & Terasvirta, Timo, 1996. "Testing the adequacy of smooth transition autoregressive models," Journal of Econometrics, Elsevier, vol. 74(1), pages 59-75, September.
- repec:cup:macdyn:v:6:y:2002:i:2:p:202-41 is not listed on IDEAS
- Tom Valentine, 1993. "The Sources of Unemployment: A Simple Econometric Analysis," Working Paper Series 32, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
- Jeff Borland, 1997. "Unemployment in Australia-Prospects and Policies: An Overview," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 391-404.
- Bodman, Philip M, 1998. "Asymmetry and Duration Dependence in Australian GDP and Unemployment," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 399-411, December.
- Maurice Peat & Max Stevenson, 1994.
"Asymmetry in the Business Cycle: Evidence from the Australian Labour Markets,"
Working Paper Series
37, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
- Peat, Maurice & Stevenson, Max, 1996. "Asymmetry in the business cycle: Evidence from the Australian labour market," Journal of Economic Behavior & Organization, Elsevier, vol. 30(3), pages 353-368, 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.
- Acemoglu, Daron & Scott, Andrew, 1994. "Asymmetries in the Cyclical Behaviour of UK Labour Markets," Economic Journal, Royal Economic Society, vol. 104(427), pages 1303-23, November.
- Randall E. Parker & Philip Rothman, .
"The Current Depth of Recession and Unemployment Rate Forecasts,"
9729, East Carolina University, Department of Economics.
- Parker Randall E. & Rothman Philip, 1998. "The Current Depth-of-Recession and Unemployment-Rate Forecasts," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 2(4), pages 1-10, January.
- Brock, W.A. & Dechert, W.D. & LeBaron, B. & Scheinkman, J.A., 1995. "A Test for Independence Based on the Correlation Dimension," Working papers 9520, Wisconsin Madison - Social Systems.
- Skalin, Joakim & Teräsvirta, Timo, 1998.
"Modelling asymmetries and moving equilibria in unemployment rates,"
SSE/EFI Working Paper Series in Economics and Finance
262, Stockholm School of Economics, revised 05 Oct 1998.
- Skalin, Joakim & Ter svirta, Timo, 2002. "Modeling Asymmetries And Moving Equilibria In Unemployment Rates," Macroeconomic Dynamics, Cambridge University Press, vol. 6(02), pages 202-241, April.
- Goodridge, Stephen & Harding, Don & Lloyd, Peter, 1995. "The Long Term Growth In Unemployment," MPRA Paper 3706, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:nst:samfok:1002. 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: (Hilde Saxi Gildberg)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.