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Productivity and unemployment: a scale-by-scale panel data analysis for the G7 countries

Author

Listed:
  • Gallegati Marco

    (DISES and SIEC, Polytechnic University of Marche, Ancona, Italy)

  • Gallegati Mauro

    (DISES and SIEC, Polytechnic University of Marche, Ancona, Italy)

  • Ramsey James B.

    (Department of Economics, New York University, New York, NY, USA)

  • Semmler Willi

    (Department of Economics, New School for Social Research, New York, NY, USA)

Abstract

Does productivity growth increase or reduce unemployment? Theoretical and empirical analyses have generally provided mixed results. In this paper we analyze the empirical relationship between productivity and unemployment over different time frames using wavelet analysis. The scale-by-scale results from panel data and nonparametric regressions methods indicate that productivity-unemployment relationship is scale-dependent, that is changes over different time horizons. Specifically, productivity growth creates unemployment in the short and medium terms, but employment in the long run.

Suggested Citation

  • Gallegati Marco & Gallegati Mauro & Ramsey James B. & Semmler Willi, 2016. "Productivity and unemployment: a scale-by-scale panel data analysis for the G7 countries," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 20(4), pages 477-493, September.
    • Handle: RePEc:bpj:sndecm:v:20:y:2016:i:4:p:477-493:n:1
    DOI: 10.1515/snde-2014-0053
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pu Chen & Willi Semmler, 2018. "Short and Long Effects of Productivity on Unemployment," Open Economies Review, Springer, vol. 29(4), pages 853-878, September.
    2. Patrick M. Crowley & David Hudgins, 2021. "Okun’s law revisited in the time–frequency domain: introducing unemployment into a wavelet-based control model," Empirical Economics, Springer, vol. 61(5), pages 2635-2662, November.
    3. Gallegati, Marco & Giri, Federico & Fratianni, Michele, 2019. "Money growth and inflation: International historical evidence on high inflation episodes for developed countries," Bank of Finland Research Discussion Papers 1/2019, Bank of Finland.
    4. Mark Partridge & Alexandra Tsvetkova & Michael Betz, 2021. "Are the most productive regions necessarily the most successful? Local effects of productivity growth on employment and earnings," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 30-61, January.
    5. Gallegati, Marco & Giri, Federico & Fratianni, Michele, 2019. "Money growth and inflation: International historical evidence on high inflation episodes for developed countries," Bank of Finland Research Discussion Papers 1/2019, Bank of Finland.
    6. repec:zbw:bofrdp:2019_001 is not listed on IDEAS
    7. Dalia Mansour-Ibrahim, 2023. "Are the Eurozone Financial and Business Cycles Convergent Across Time and Frequency?," Computational Economics, Springer;Society for Computational Economics, vol. 61(1), pages 389-427, January.

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    More about this item

    Keywords

    panel data; productivity growth; unemployment; wavelets;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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