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Unemployment hysteresis in Central Asia

Author

Listed:
  • Furuoka, Fumitaka
Abstract
Unemployment hysteresis is an important but rather controversial issue in applied economics because the existence of hysteresis in unemployment rate poses a challenge to a central building-block of macroeconomic theory. The current paper chooses five Central Asian countries, namely Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, as a case study to examine the unemployment hysteresis for the period of 1991-2012. The number of observation is 22. In order to overcome the insufficient data, this paper uses the Bootstrap method to estimate the critical values (Park, 2003). For the purpose of empirical analysis, this paper uses the SURADF tests (Breuer et al., 2002) and the Fourier ADF tests (Enders and Lee, 2012). The univariate unit root tests indicates that unemployment rate in Kazakhstan, Kyrgyzstan and Tajikistan can be the stationary process and unemployment rates in Turkmenistan and Uzbekistan can be the unit root process. The panel unit root indicates that unemployment rate in the Central Asia can be the stationary process. Overall, the current study concludes that unemployment rates in Central Asia can be best described as stationary process in line with the natural rate hypothesis.

Suggested Citation

  • Furuoka, Fumitaka, 2014. "Unemployment hysteresis in Central Asia," MPRA Paper 60323, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:60323
    as

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    References listed on IDEAS

    as
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    Cited by:

    1. Iwasaki, Ichiro, 2018. "International Presence of the Japanese Study of Russian and East European Economies," RRC Working Paper Series 74, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    Unemployment hysteresis; Central Asia; unit root; nonlinear;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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