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Unemployment hysteresis in the East Asia‐Pacific region: new evidence from MADF and SURADF tests
Author(s) -
Furuoka Fumitaka
Publication year - 2012
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/j.1467-8411.2012.01351.x
Subject(s) - unemployment , hysteresis , context (archaeology) , east asia , economics , china , pacific rim , empirical evidence , demographic economics , geography , macroeconomics , physics , archaeology , quantum mechanics , philosophy , epistemology
This study re‐examined the unemployment hysteresis hypothesis in the context of twelve countries in the East Asia‐Pacific region, namely Australia, China, Guam, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, and Thailand. It employed the multivariate augmented Dickey–Fuller test and the seemingly unrelated regression augmented Dickey–Fuller test for this purpose. The empirical results confirmed the presence of unemployment hysteresis in these countries, except in South Korea and New Zealand. The findings indicated that the equilibrium rate of unemployment in the East Asia‐Pacific region tended to be path dependent and that cyclical fluctuations in these countries' economies could have permanent effects on the level of unemployment. These results provide additional empirical proof of the validity of the hysteresis hypothesis.