Citation

Solarin, Sakiru Adebola and Lafuente, Carmen and Gil-Alana, Luis A. and González-Blanch, María Jesús (2024) Persistence in the Unemployment and Inflation Relationship. Evidence from 38 OECD Countries. Journal of the Knowledge Economy. ISSN 1868-7865

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Abstract

This paper focuses on the analysis of persistence in the unemployment and inflation rates in a group of 38 OECD countries as well as on the relationship between the two variables. For this purpose, fractional integration is used. The results indicate that the two individual variables are highly persistent, especially the unemployment rate, and evidence of mean reversion is only found in the cases of Colombia and Costa Rica for unemployment and in Norway for inflation. Conducting the analysis on the difference between the two variables, the order of integration is significantly smaller in a number of cases, and reversion to the mean takes place in the cases of Austria, Switzerland, Costa Rica, Israel, and Turkey. Policy recommendations derived from the results are presented in the concluding section of the article.

Item Type:	Article
Uncontrolled Keywords:	Unemployment · Inflation · Persistence · Fractional integration
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management > HD61 Risk in industry. Risk management
Divisions:	Faculty of Business (FOB)
Depositing User:	Ms Nurul Iqtiani Ahmad
Date Deposited:	30 May 2024 02:23
Last Modified:	30 May 2024 02:23
URII:	http://shdl.mmu.edu.my/id/eprint/12486

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