IDEAS home Printed from https://ideas.repec.org/p/edg/anecon/0021.html
   My bibliography  Save this paper

Lagged Adjustment Processes and the Natural Rate in Spain: A Comparison with Portugal

Author

Listed:
  • Roberto Bande

    (Departamento de Fundamentos da Análise Económica. Universidade de Santiago de Compostela)

Abstract

This paper provides new evidence on the recent evolution of the unemployment rate in Spain. Specifically, we interpret the movements of the unemployment rate under the Chain Reaction Theory, whereby unemployment is viewed as the outcome of the interplay of a series of lagged adjustment processes in the labour market with persistent shocks, such that the unemployment needs a certain span of time to endogeinize the effects of such shocks. We show that persistent shocks make the actual Spanish unemployment rate depart from its natural level for prolonged periods of time. Portugal, on the contrary, shows greater labour market flexibility, which allows for faster adjustment, and hence, lower unemployment persistence.

Suggested Citation

  • Roberto Bande, 2002. "Lagged Adjustment Processes and the Natural Rate in Spain: A Comparison with Portugal," Documentos de trabajo - Analise Economica 0021, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    • Handle: RePEc:edg:anecon:0021
    as

    Download full text from publisher

    File URL: http://docs.game-idega.com/documentos_de_traballo/analise_economica/analise_economica_21.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Blanchard, Olivier & Jimeno, Juan F, 1995. "Structural Unemployment: Spain versus Portugal," American Economic Review, American Economic Association, vol. 85(2), pages 212-218, May.
    2. Roberto Bande & Melchor Fernández & Victor Montuenga, 2001. "Disparidades regionales en la tasa de paro: El papel del mecanismo de determinación salarial," Documentos de trabajo - Analise Economica 0018, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    3. Roberto Bande, 2002. "Ajustes Dinámicos en las Tasas de Paro: España vs. Portugal," Documentos de trabajo - Analise Economica 0020, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Castillo, Sonsoles & Jimeno, Juan F., 1998. "The fall in consumption from being unemployed in Portugal and Spain," UC3M Working papers. Economics 4156, Universidad Carlos III de Madrid. Departamento de Economía.
    2. López Díaz, J., 1999. "Divergencia real en la unión monetaria: Un ejercicio de simulación," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 13, pages 87-100, Diciembre.
    3. Adsera, Alicia & Boix, Carles, 2000. "Must we choose? European unemployment, American inequality, and the impact of education and labor market institutions," European Journal of Political Economy, Elsevier, vol. 16(4), pages 611-638, November.
    4. Echavarría-Soto, Juan José & López, Enrique & Ocampo, Sergio & Rodríguez-Niño, Norberto, 2012. "Choques, instituciones laborales y desempleo en Colombia," Chapters, in: Arango-Thomas, Luis Eduardo & Hamann-Salcedo, Franz Alonso (ed.), El mercado de trabajo en Colombia : hechos, tendencias e instituciones, chapter 18, pages 753-794, Banco de la Republica de Colombia.
    5. Povilas Lastauskas & Julius Stakėnas, 2020. "Labour market institutions in open economy: Sectoral reallocations, aggregate adjustments, and spillovers," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 814-845, August.
    6. Cuéllar Martín, Jaime & Martín-Román, Ángel L. & Moral, Alfonso, 2017. "A composed error model decomposition and spatial analysis of local unemployment," MPRA Paper 79783, University Library of Munich, Germany.
    7. Castillo, Sonsoles & Jimeno, Juan F., 1998. "A tale of two neighbour economies: labour market dynamics in Portugal and Spain," UC3M Working papers. Economics 4154, Universidad Carlos III de Madrid. Departamento de Economía.
    8. Josep Lluis Carrion Silvestre & Tomas del Barrio Castro & Enrique Lopez Bazo, 2002. "Level shifts in a panel data based unit root test. An application to the rate of unemployment," Working Papers in Economics 79, Universitat de Barcelona. Espai de Recerca en Economia.
    9. Dolado, Juan J. & Jimeno, Juan F., 1997. "The causes of Spanish unemployment: A structural VAR approach," European Economic Review, Elsevier, vol. 41(7), pages 1281-1307, July.
    10. Morales, Marina, 2018. "Can the composition of the family during adolescence influence their future unemployment situation? Evidence for Spain," MPRA Paper 86770, University Library of Munich, Germany.
    11. Verheul, Ingrid & Van Stel, André & Thurik , Roy & Urbano, David, 2006. "The Relationship between Business Ownership and Unemployment in Spain: A Matter of Quantity or Quality?/La relación entre el autoempleo y el desempleo en España: Una cuestión de cantidad o de calidad?," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 24, pages 435-457, Agosto.
    12. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
    13. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    14. Yu‐Fu Chen & Dennis Snower & Gylfi Zoega, 2003. "Labour‐market Institutions and Macroeconomic Shocks," LABOUR, CEIS, vol. 17(2), pages 247-270, June.
    15. Ravi Balakrishnan, 2001. "The interaction of firing costs and on-the-job search: an application of a search theoretic model to the Spanish labour market," Working Papers 0102, Banco de España.
    16. Salvador Barrios & Juan José de Lucio, 2003. "Economic Integration and Regional Business Cycles: Evidence from the Iberian Regions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 497-515, September.
    17. Assaf Razin & Chi-Wa Yuen, 1996. "Labor Mobility and Fiscal Coordination," NBER Working Papers 5433, National Bureau of Economic Research, Inc.
    18. Joop Hartog & Pedro Pereira & José Vieira, 2000. "Inter-industry Wage Dispersion in Portugal," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(4), pages 353-364, December.
    19. Fabiani, S. & Palenzuela-Rodriguez, D., 2001. "Model-Based Indicators of Labour Market Rigidity," Papers 57, Quebec a Montreal - Recherche en gestion.
    20. Laura Barbieri & Chiara Mussida, 2018. "Structural differences across macroregions: an empirical investigation," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 215-246, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edg:anecon:0021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuel Fernandez Grela (email available below). General contact details of provider: https://edirc.repec.org/data/egusces.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.