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Underlying Trends In Employmentoutput Equation: The Case Of Jordan

Author

Listed:
  • ARQAM AL-RABBAIE

    (Department of Economics Hashemite University, Jordan)

  • AHMAD A. ALWAKED

    (Department of Economics Hashemite University, Jordan)

  • YASEEN ALTARAWNEH

    (Department of Economics Hashemite University, Jordan)

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

  • Arqam Al-Rabbaie & Ahmad A. Alwaked & Yaseen Altarawneh, 2009. "Underlying Trends In Employmentoutput Equation: The Case Of Jordan," Perspectives of Innovation in Economics and Business (PIEB), Prague Development Center, vol. 3(3), pages 35-37.
    • Handle: RePEc:pdc:jrpieb:v:3:y:2009:i:3:p:35-37
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    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Employment; stochastic trend; structural time series modelling;
    All these keywords.

    JEL classification:

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

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