Persistence and stochastic convergence of euro area unemployment rates*

Krištić, Irena Raguž; Dumančić, Lucija Rogić; Arčabić, Vladimir

doi:10.1016/j.econmod.2018.07.032

Cited by 15 publications

(15 citation statements)

References 17 publications

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“…However, these authors do not analyze the influence of euro area membership on the unemployment rate using unit root tests. Krištić et al (2018), conclude, like previous authors, that the hysteresis hypothesis is verified in the context of the euro zone. However, these authors stand out from the others by showing the existence of stochastic convergence of unemployment rates.…”

Section: Review Of the Literaturesupporting

confidence: 88%

“…Empirically, the literature is inconclusive about the presence or absence of hysteresis (Monfort et al, 2016). Additionally, Krištić et al (2018), unlike other authors (Lee, 2010;Chang, 2011;Meng et al, 2017), have highlighted the existence of stochastic convergence of unemployment rates in the euro zone countries over the period 1995-2016. These divergent findings on the issue under review justify the interest in extending the discussion to ECCAS countries to contribute to the existing literature.…”

Section: Introductionmentioning

confidence: 94%

“…It should be noted that little work has been done in Africa, particularly in ECCAS countries, testing the hysteresis hypothesis and applying the stochastic divergence hypothesis test. Thus, as in Krištić et al (2018), the objective of this research is twofold. First, it is to specify the dates of potential breaks (or shocks) while verifying whether these shocks, notably the accession to CEMAC, could have generated permanent effects.…”

Section: Introductionmentioning

confidence: 99%

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Unemployment Rate in ECCAS Countries: Structural Changes and Stochastic Convergence

Bouanza¹,

Ndinga²

2020

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This paper aims, on the one hand, to specify the dates of potential breaks (or shocks) in the unemployment rate times series of ECCAS countries while verifying whether these shocks, notably accession to CEMAC, could have generated permanent effects and, on the other hand, to assess the hypothesis of stochastic divergence of the unemployment rate. To this end, an econometric analysis is carried out based on unemployment rate time series at quarterly frequency (1991-2018). The results suggest that overall, there is no presence of the hysteresis effect and that CEMAC accession had a significant transitory effect only in Equatorial Guinea. Overall, effective unemployment rates converge towards the average level in the subregion during the sample period.

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Section: Review Of the Literaturesupporting

confidence: 88%

Section: Introductionmentioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

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Unemployment Rate in ECCAS Countries: Structural Changes and Stochastic Convergence

Bouanza¹,

Ndinga²

2020

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“…There is no particular evidence that the global financial crisis and the subsequent sovereign debt crisis have had a substantial effect on the way actual unemployment affects the CCIU. This finding is striking taking into account the documented unemployment hysteresis in the EA (Krištić et al, 2018). The most interesting finding is that the magnitude of unemployment effects is independent of consumers' socio-economic status, as it is quite similar for all 16 subgroups.…”

Section: Ag3 Ag4mentioning

confidence: 55%

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Clavería

Lolić²,

Monte

et al. 2020

SSRN Journal

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In this study we construct quarterly consumer confidence indicators of unemployment for the euro area using as input the consumer expectations for sixteen socio-demographic groups elicited from the Joint Harmonised EU Consumer Survey. First, we use symbolic regressions to link unemployment rates to qualitative expectations about a wide range of economic variables. By means of genetic programming we obtain the combination of expectations that best tracks the evolution of unemployment for each group of consumers. Second, we test the out-of-sample forecasting performance of the evolved expressions. Third, we use a state-space model with timevarying parameters to identify the main macroeconomic drivers of unemployment confidence and to evaluate whether the strength of the interplay between variables varies across the economic cycle. We analyse the differences across groups, obtaining better forecasts for respondents comprised in the first quartile with regards to the income of the household and respondents with at least secondary education. We also find that the questions regarding expected major purchases over the next 12 months and savings at present are by far, the variables that most frequently appear in the evolved expressions, hinting at their predictive potential to track the evolution of unemployment. For the economically deprived consumers, the confidence indicator seems to evolve independently of the macroeconomy. This finding is rather consistent throughout the economic cycle, with the exception of stock market returns, which governed unemployment confidence in the pre-crisis period.

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“…In 1986, Baumol and Abramovitz applied this theory to empirical research [20,21], regional convergence has gradually become an important topic. Currently, the studies of convergence and divergence mainly focus on economic growth, income, consumption expenditure, energy intensity, housing prices, and unemployment [22][23][24][25][26][27][28][29][30][31][32], and the types of convergence are various, including σ convergence (reflecting a decreasing trend of the urbanization level gap between regions or countries over time), β convergence (convergence only after controlling the factors affecting steady state), club convergence (convergence within subsamples), and stochastic convergence (examining whether the initial deviations from some hypothetical long-term equilibrium of an investigated indicator decrease over time). Correspondingly, the methods of measuring convergence are also different, such as CV sigma-convergence and beta-convergence, club convergence approach, Markov chain and spatial Markov chain methods, and econometric approach.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Population Mobility Contribute to Urbanization Convergence? Empirical Evidence from Three Major Urban Agglomerations in China

et al. 2020

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Population mobility accelerates urbanization convergence and mitigates the negative impact of the spatial agglomeration effect on urbanization convergence, which is the most important conclusion in this paper. Taking 38 cities in China’s three urban agglomerations (the Yangtze River Delta, the Pearl River Delta, and the Beijing–Tianjin–Hebei region) from 2005 to 2016 as research subjects, the study first shows that there is a large gap in the level of urbanization between the three major urban agglomerations, but the gap has been constantly narrowed and presents a trend of absolute convergence and conditional convergence. Furthermore, without adding a population mobility variable, the combination of the diffusion effect of high-urbanization cities and the high growth rate of low-urbanization cities causes the inter-regional urbanization level to be continuously convergent in the Yangtze River Delta region; however, the combination of the agglomeration effect of high-urbanization cities and the high growth rate of low-urbanization cities causes the inter-regional urbanization to be divergent in the Pearl River Delta and the Beijing–Tianjin–Hebei region. Under the influence of population mobility, the “catch-up” effect in low-urbanization regions is greater than the agglomeration effect in high-urbanization regions, which promotes the continuous convergence of inter-regional urbanization.

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Persistence and stochastic convergence of euro area unemployment rates*

Cited by 15 publications

References 17 publications

Unemployment Rate in ECCAS Countries: Structural Changes and Stochastic Convergence

Unemployment Rate in ECCAS Countries: Structural Changes and Stochastic Convergence

Economic Determinants of Employment Sentiment: A Socio-Demographic Analysis for the Euro Area

Does Population Mobility Contribute to Urbanization Convergence? Empirical Evidence from Three Major Urban Agglomerations in China

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