Baynesian evidence on the structure of unemployment
AuthorSummers, Peter M.
University of Melbourne Author/sSUMMERS, PETER
AffiliationEconomics and Commerce: Melbourne Institute of Applied Economic and Social Research
CitationsSummers, Peter M. (2003) Baynesian evidence on the structure of unemployment.
Access StatusOpen Access
ISSN 1328-4991 (Print) ISSN 1447-5863 (Online) ISBN 0734031157 Melbourne Institute Working Paper No. 3/03
This paper presents a Bayesian assessment of the likelihood of unit roots in the unemployment rates of 16 OECD countries. Bayesian techniques for detecting multiple structural breaks in time series have recently been developed by Wang and Zivot (2000). I apply these tests to a data set recently analyzed by Papell et al (2000). I also treat the number of structural breaks as an additional parameter to be estimated. I find virtually no support for unit root hysteresis in OECD unemployment rates, this result is very robust to the choice of prior
KeywordsMultiple structural breaks; Bayesian analysis; unit root; unemployment rate JEL classification: C220 Econometric methods: single equation models: time-series models; C110 Bayesian analysis; E240 Macroeconomics: employment; unemployment; wages; wage indexation
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