Original scientific paper

https://doi.org/10.18045/zbefri.2018.2.559

Are unemployment rates stationary for SEE10 countries? Evidence from linear and nonlinear dynamics

Saša Obradović orcid.org/0000-0001-9918-7271 ; University of Kragujevac - Faculty of Economics, Kragujevac, Serbia
Lela Ristić orcid.org/0000-0002-4590-8261 ; University of Kragujevac - Faculty of Economics, Kragujevac, Serbia
Nemanja Lojanica orcid.org/0000-0003-1460-8466 ; University of Kragujevac - Faculty of Economics, Kragujevac, Serbia

Abstract

This article aims to answer the questions concerning the dynamics of unemployment rates, including whether there is a subsequent hysteresis in the selected sample of ten countries of the South East Europe. The linear and nonlinear tests have been used to determine the stationarity of unemployment rates. The findings show that in eight out of ten countries, unemployment is a stationary process which implies that the hysteresis hypothesis has not been confirmed. The unemployment rates in Albania, Bulgaria, Slovenia, Croatia, Romania, Greece, Montenegro and Turkey manifest mean reverting behaviour. The movements of unemployment rates in the next period can be forecasted with a relatively high degree of certainty in terms of the mentioned countries. The unemployment in FYR Macedonia and Serbia is a non-stationary process. The results further emphasize the importance of allowing asymmetric adjustment and structural breaks, especially in the case of Romania, Montenegro and Turkey.

Keywords

hysteresis; unemployment rate; non-linearity; stationarity and unit root

Hrčak ID:

213577

URI

https://hrcak.srce.hr/213577

Publication date:

28.12.2018.

Article data in other languages: croatian

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