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Hysteresis in Unemployment: Evidence from OECD Estimates of the Natural Rate / Laurence M. Ball, Joern Onken.
- Format:
- Book
- Author/Creator:
- Ball, Laurence M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w29343.
- NBER working paper series no. w29343
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- This paper studies the dynamics of unemployment (u) and its natural rate (u*), with u* measured by real-time estimates for 29 countries from the OECD. We find strong evidence of hysteresis: an innovation in u causes u* to change in the same direction, and therefore has permanent effects. For our baseline specification, a one percentage point deviation of u from u* for one year has a long-run effect of 0.16 points on both variables. When we allow asymmetry, we find, perhaps surprisingly, that decreases in u have larger long-run effects than increases in u.
- Notes:
- Print version record
- October 2021.
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