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An empirical note on testing hysteresis in unemployment for ten European countries: panel SURADF approach

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  • Tsangyao Chang
  • Kuei-Chiu Lee
  • Chien-Chung Nieh
  • Ching-Chun Wei

Abstract

The hysteresis hypothesis in unemployment for ten European countries are tested using newly developed Panel SURADF tests of Breuer et al. (2001) for the 1961-1999 period. While the other Panel-based unit root tests are joint tests of a unit root for all members of the panel and are incapable of determining the mix of I(0) and I(1) series in the panel setting, the Panel SURADF tests a separate unit-root null hypothesis for each individual panel member and, therefore identifies how many and which series in the panel are stationary processes. The hysteresis hypothesis is confirmed for all the European countries except Belgium and the Netherlands when Breuer et al.'s Panel SURADF tests are conducted.

Suggested Citation

  • Tsangyao Chang & Kuei-Chiu Lee & Chien-Chung Nieh & Ching-Chun Wei, 2005. "An empirical note on testing hysteresis in unemployment for ten European countries: panel SURADF approach," Applied Economics Letters, Taylor & Francis Journals, vol. 12(14), pages 881-886.
    • Handle: RePEc:taf:apeclt:v:12:y:2005:i:14:p:881-886
    DOI: 10.1080/13504850500365871
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