Hysteresis in unemployment: empirical evidence from Taiwan's region data based on panel unit root tests

Chang, Tsangyao; Yang, Ming Jing; Liao, Hui-Chin; Lee, Chia-Hao

doi:10.1080/00036840500486516

Cited by 14 publications

(8 citation statements)

References 33 publications

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“…We obtained overwhelming evidence against the null hypothesis of a unit root and, therefore, concluded that all variables were stationary. The results are in accordance with Chang et al (2007).…”

Section: Methodssupporting

confidence: 90%

Habit formation or word of mouth: What does lagged dependent variable in tourism demand models imply?

Liu

2019

Tourism Economics

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The effects of habit formation/persistence (HFP) and word of mouth (WOM) each play a critical role in influencing tourists’ decisions regarding whether to visit tourism destinations and therefore tourism policies and tourism management resource allocations. Nevertheless, in previous tourism demand studies, the two effects have been represented by the same time-lagged dependent variable, which makes the variable have an ambiguous meaning and biases the empirical results. The purpose of this study is to solve the ambiguity of a lagged dependent variable in tourism demand. We used economic theories regarding internal habits and external habits to clarify the meanings of HFP and WOM and revised the tourism demand model into a spatial dynamic panel model (SDPM). The empirical results suggested that an SDPM is a more accurate model for modeling tourism demand. The effects of variables in an SDPM are more consistent with theoretical expectations.

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Section: Methodssupporting

confidence: 90%

Habit formation or word of mouth: What does lagged dependent variable in tourism demand models imply?

Liu

2019

Tourism Economics

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“…On the contrary, Smyth (2003) both used the LLC and the IPS PUR tests from the 1983Q2 to 2002Q1 in states of Australia and he concluded that the hysteresis hypothesis was valid. Chang et al (2007) used the LLC, the IPS and Taylor and Sarno (1998) 's PUR tests from 1993M7 to 2001M9 in 21 regions of Taiwan, and they concluded that the hysteresis hypothesis was rejected by all PUR tests. Gomes and Da Silva (2009) applied the unit root test by Lee and Strazicich (2003) from 1981M1 to 2002M12 in 6 major Brazilian metropolitan-areas and the result of unit root tests showed that the hysteresis hypothesis was only rejected in one region.…”

Section: Introductionmentioning

confidence: 99%

Hysteresis in Regional Unemployment Rates in Turkey

Gözgör¹

2012

IJEF

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It is important for policy-makers to understand the nature of unemployment, particularly in the regional level. As a developing country, Turkey suffers from severe unemployment, as well as major regional discrepancies, even in the periods of high-level economic growth. In this study, we analyze a possible hysteresis effect in regional unemployment rates in Turkey from 2004 to 2011. We apply heterogeneous or homogenous Panel-based Unit Root (PUR) tests that they can be arranged in groups by cross-section independence or cross-section dependence. Results of the PUR tests show that there is no mean-reversion in regional unemployment rates and natural-rate of unemployment hypothesis is strongly rejected. Thus, empirical results provide significant support for the existence of the hysteresis hypothesis in regional unemployment rates in Turkey.

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“…In the countries of Asian and Africa, the empirical evidence reported is also diverse (Chang, et al, 2007;Lee, Wu and Lin, 2010;Eisazadeh and Tabarsi, 2013;Furuoka, 2014a;Pikoko and Phiri, 2019;Yaya, Ogbonna and Mudida 2019). Chang et al (2007) found no evidence of UHH in all the 21 regions of Taiwan. The results documented by Lee, Wu and Lin (2010) showed that there exists UHH in all the East-Asian countries considered including Taiwan.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Unemployment Still Follow Hysteresis Hypothesis in Nigeria? Evidence from Linear and Nonlinear Unit Root Test Methods

Raifu

Abodunde

2020

JICD

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In the face of persistent rise in unemployment figure in Nigeria, this study re-examines the unemployment hysteresis hypothesis by deploying both linear and nonlinear unit root estimation techniques. Using Nigerian unemployment rate data from 1970 to 2017, evidence from the adopted unit toot test techniques, except the quantile unit root test, showed that unemployment hysteresis hypothesis holds in Nigeria. This implies that when a shock that affects unemployment occurs, there is a high tendency that the effect would be permanent. However, the finding from the quantile unit root test sheds light on the need for a timely policy response. If the policy interventions such as fiscal policy and other forms of policies are taken regularly, especially at every quarter, the tendency for unemployment to revert to its pre-shock state is high.

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Hysteresis in unemployment: empirical evidence from Taiwan's region data based on panel unit root tests

Cited by 14 publications

References 33 publications

Habit formation or word of mouth: What does lagged dependent variable in tourism demand models imply?

Habit formation or word of mouth: What does lagged dependent variable in tourism demand models imply?

Hysteresis in Regional Unemployment Rates in Turkey

Does Unemployment Still Follow Hysteresis Hypothesis in Nigeria? Evidence from Linear and Nonlinear Unit Root Test Methods

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