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Cointegration and common trends on the West German labour market

Author

Listed:
  • Kai Carstensen

    (Institut fØr Statistik und ãkonometrie der Christian-Albrechts-UniversitÄt Kiel, Olshausenstr. 40, D-24098 Kiel, Germany)

  • Gerd Hansen

    (Institut fØr Statistik und ãkonometrie der Christian-Albrechts-UniversitÄt Kiel, Olshausenstr. 40, D-24098 Kiel, Germany)

Abstract

In this paper we analyze the West German labour market by means of a cointegrated structural VAR model. We find sensible stable long-run relationships that are interpreted as a labour demand, a wage setting and a goods market equilibrium. In order to study the dynamic behaviour of the model we identify two common trends that push unemployment. We find that goods market shocks have only transitory impacts on unemployment. In the long run, it is almost equally determined by technology and labour supply factors. However, transitory shocks have major importance in the shorter run since adjustment processes are rather sluggish.

Suggested Citation

  • Kai Carstensen & Gerd Hansen, 2000. "Cointegration and common trends on the West German labour market," Empirical Economics, Springer, vol. 25(3), pages 475-493.
    • Handle: RePEc:spr:empeco:v:25:y:2000:i:3:p:475-493
    Note: received: Sept. 1998/Final version accepted: Feb. 2000
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    Cited by:

    1. Holmlund, Bertil & Alexius, Annika, 2008. "Monetary Policy and Swedish Unemployment Fluctuations," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-25.
    2. Rita Duarte & Carlos Marques, 2013. "The dynamic effects of shocks to wages and prices in the United States and the Euro Area," Empirical Economics, Springer, vol. 44(2), pages 613-638, April.
    3. repec:ksp:journ3:v:1:y:2015:i:4:p:256-274 is not listed on IDEAS
    4. Marianna Oliskevych, 2015. "Dynamic Analysis and Modeling of the Labor Market Development in Ukraine," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(2), pages 127-135, April.
    5. Tafirenyika Sunde & Olusegun A. Akanbi, 2016. "Sources of unemployment in Namibia: an application of the structural VAR approach," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 8(2), pages 125-143.
    6. Linzert Tobias, 2004. "Sources of German Unemployment: Evidence from a Structural VAR Model / Die Hintergründe deutscher Arbeitslosigkeit: Evidenz von einem Strukturellen VAR," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 224(3), pages 317-336, June.
    7. Elena Vakulenko, 2013. "Labour Market Analysis using Time Series Models: Russia 1999-2011," Quaderni del Dipartimento di Economia, Finanza e Statistica 120/2013, Università di Perugia, Dipartimento Economia.
    8. Ralf Brüggemann, 2006. "Sources of German unemployment: a structural vector error correction analysis," Empirical Economics, Springer, vol. 31(2), pages 409-431, June.
    9. Linzert, Tobias, 2001. "Sources of German unemployment: evidence from a structural VAR model," ZEW Discussion Papers 01-41, ZEW - Leibniz Centre for European Economic Research.
    10. Tafirenyika SUNDE, 2015. "The effects of monetary policy on unemployment in Namibia," Journal of Economic and Social Thought, KSP Journals, vol. 2(4), pages 256-274, December.
    11. Antonio Rodriguez-Gil, 2018. "Hysteresis and labour market institutions. Evidence from the UK and the Netherlands," Empirical Economics, Springer, vol. 55(4), pages 1985-2025, December.

    More about this item

    Keywords

    cointegration · common trends · structural shocks · unemployment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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