A simple nonlinear dynamic model for unemployment: Explaining the spanish case

DOI10.1155/2008/981952MaRDI QIDQ937032zbMATH OpenOpenAlexWikidataFDO

Authors João Ricardo Faria, Miguel A. León-Ledesma

Publication date 20 August 2008

Published in Discrete Dynamics in Nature and Society (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://eudml.org/doc/129109

Mathematics Subject Classification ID

Dynamical systems in optimization and economics (37N40) Environmental economics (natural resource models, harvesting, pollution, etc.) (91B76)

Review text

Summary: Spanish unemployment is characterized by three distinct regimes of low, medium, and high unemployment and by a fast transition between them. This paper presents a simple nonlinear dynamic model that is able to explain this behavior with multiple equilibria and jumps describing the transition between equilibria. The model has only a small number of parameters capturing the fundamentals of labor markets and macroeconomic and institutional factors. The model is capable of generating unemployment dynamics that encompass the ``unique natural rate hypothesis, the structuralist hypothesis, and the hysteresis hypothesis.

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Cites work

• A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle
• ON THE DETERMINATION OF THE NUMBER OF REGIMES IN MARKOV-SWITCHING AUTOREGRESSIVE MODELS
• UNEMPLOYMENT, GROWTH, AND FISCAL POLICY: NEW INSIGHTS ON THE HYSTERESIS HYPOTHESIS

Cited in

(5)

• Unemployment and entrepreneurship: a cyclical relation?
• Patterns of macroeconomic indicators preceding the unemployment rise in Western Europe and the USA
• Evaluating the persistence and structuralist theories of unemployment from a nonlinear per\-spective
• scientific article; zbMATH DE number 5639782 (Why is no real title available?)
• Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications

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