UNEMPLOYMENT HYSTERESIS IN MIDDLE-INCOME COUNTRIES

JDE (Journal of Developing Economies)

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Field Value
 
Title UNEMPLOYMENT HYSTERESIS IN MIDDLE-INCOME COUNTRIES
 
Creator Boukraine, Wissem
 
Description Business cycles pave the way for asymmetry in the unemployment rate behavior with rapid increases during recessions and slight decreases in expansions. It, in turn, may raise the non-accelerating inflation rate of unemployment and the cost in terms of inflation of any demand stimulus policy. The recent jump in unemployment worldwide due to the COVID-19 pandemic and the government’s stimulus package following it raises questions about the cost of such a decision. We use the smooth transition model (STR) to analyze unemployment dynamics on quarterly data over the last two decades for fifteen middle-income countries. Our results suggest the absence of hysteresis except for Bulgaria, Mexico, and Ukraine. Our policy recommendation for these countries is the necessity of labor market reforms, as hysteresis will considerably reduce any economic stimulus on unemployment.Keywords: Unemployment, hysteresis, STRJEL Classification: C10, J60
 
Publisher Universitas Airlangga
 
Contributor
 
Date 2021-06-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://e-journal.unair.ac.id/JDE/article/view/22617
10.20473/jde.v6i1.22617
 
Source JDE (Journal of Developing Economies); Vol 6, No 1 (2021); 137-149
2528-2018
2541-1012
 
Language eng
 
Relation https://e-journal.unair.ac.id/JDE/article/view/22617/14351
 
Rights Copyright (c) 2021 Wissem Boukraine
http://creativecommons.org/licenses/by/4.0
 

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