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Integrating the Empirical Tests of the Natural Rate Hypothesis: A Meta‐Regression Analysis
Author(s) -
Stanley T. D.
Publication year - 2005
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.0023-5962.2005.00305.x
Subject(s) - econometrics , statistical hypothesis testing , meta analysis , meta regression , economics , statistics , unemployment , natural (archaeology) , mathematics , biology , macroeconomics , medicine , paleontology
Summary A meta‐analysis of thirty‐four restriction tests from nine studies of the natural rate of unemployment hypothesis (NRU) finds the statistical trace of a false empirical hypothesis. A theme of bias and misspecification among those studies that tend to be more supportive of NRU emerges. When combined with a separate meta‐analysis of NRU's falsifying hypothesis, unemployment ‘hysteresis’ (Stanley 2004a), the natural rate hypothesis may be regarded as empirically ‘falsified’ (Popper 1959). Monte Carlo simulations validate the meta‐regression methods used here to integrate different restriction tests and to identify their limitations.