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Unemployment hysteresis in EU countries: what do we really know about it?

Dimitris K. Christopoulos (Department of Economic and Regional Development, Panteion University, Athens, Greece)
Miguel A. León‐Ledesma (Department of Economics, University of Kent, Canterbury, UK)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 22 May 2007

1473

Abstract

Purpose

The paper aims to re‐examine the stationarity properties of unemployment rates in 12 European Union (EU) countries over the period 1988: I‐1999: IV.

Design/methodology/approach

This paper applies a battery of second‐generation panel unit root tests that allow for cross‐sectional correlation.

Findings

The study shows that, contrary to previous empirical literature, hysteresis does not characterise EU unemployment.

Originality/value

This paper uses recent advances in the econometrics of panel unit root tests. The new tests have more power than the traditional ones in detecting the null hypothesis of a unit root.

Keywords

Citation

Christopoulos, D.K. and León‐Ledesma, M.A. (2007), "Unemployment hysteresis in EU countries: what do we really know about it?", Journal of Economic Studies, Vol. 34 No. 2, pp. 80-89. https://doi.org/10.1108/01443580710745353

Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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