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The asian financial crisis and the natural rate of unemployment: Estimates from a structural var for the newly industrializing economies of asia
Author(s) -
Groenewold Nicolaas,
Tang Sam Hak Kan
Publication year - 2004
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2004.00236.x
Subject(s) - natural rate of unemployment , economics , unemployment , unemployment rate , financial crisis , vector autoregression , structural vector autoregression , autoregressive model , macroeconomics , monetary economics , econometrics , monetary policy
. We use a structural vector autoregressive model to estimate the natural rate of unemployment for Hong Kong, Korea, Singapore and Taiwan for the period 1982–2000. Our results show that the dramatic rise in the unemployment rate observed in Hong Kong and Korea was mainly the result of demand shocks rather than structural changes, while in Singapore the unemployment rate rise reflected almost entirely a rise in the natural rate. Taiwan's natural rate has been relatively stable. We offer explanations for these different results in terms of the different economic characteristics (particularly labor market features) of the four countries.