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Underlying trends in employment-output equation: the case of Jordan

Author

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  • Al-Rabbaie, Arqam
  • Alwaked, Ahmad
  • Altarawneh, Yaseen

Abstract

The underlying employment trend (UET) is investigated in Jordanian economy over the period 1989- 2004 using structural time series model (STSM). This approach allows to modelling the trend in its stochastic form introduced by Harvey (1989). The results show that a stochastic trend is preferred to deterministic trend. In addition, the inclusion or exclusion of the conventional deterministic trend leads to overestimated output elasticity. Furthermore, the UET is found to be non-linear, down downward sloping.

Suggested Citation

  • Al-Rabbaie, Arqam & Alwaked, Ahmad & Altarawneh, Yaseen, 2009. "Underlying trends in employment-output equation: the case of Jordan," Perspectives of Innovations, Economics and Business (PIEB), Prague Development Center (PRADEC), vol. 3, pages 1-3, December.
    • Handle: RePEc:ags:jrpieb:94571
    DOI: 10.22004/ag.econ.94571
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    References listed on IDEAS

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    1. Harvey, A C, et al, 1986. "Stochastic Trends in Dynamic Regression Models: An Application to the Employment-Output Equations," Economic Journal, Royal Economic Society, vol. 96(384), pages 975-985, December.
    2. Harvey, Andrew C & Koopman, Siem Jan, 1992. "Diagnostic Checking of Unobserved-Components Time Series Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(4), pages 377-389, October.
    3. David F. Hendry & Katarina Juselius, 2001. "Explaining Cointegration Analysis: Part II," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 75-120.
    4. Harvey, Andrew, 1997. "Trends, Cycles and Autoregressions," Economic Journal, Royal Economic Society, vol. 107(440), pages 192-201, January.
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    More about this item

    Keywords

    Research and Development/Tech Change/Emerging Technologies;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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