HYSTERESIS EFFECT ON UNEMPLOYMENT: EVIDENCE FROM THE VISEGRAD COUNTRIES
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Hysteresis effect on unemployment is a much discussed topic in macroeconomics. However, empirical findings regarding the existence of hysteresis effect are contradictory. The present study investigates hysteresis in the unemployment rates of the Visegrad Group countries, namely: the Czech Republic, Hungary, Poland and Slovakia. For this purpose it employs the following three econometric methods: (1) the linear unit root tests; (2) the Seemingly Unrelated Regressions Augmented Dickey-Fuller (SURADF) test; and (3) the Fourier Dickey-Fuller (FADF) test. The findings revealed that among the Visegrad Group countries hysteresis effect was found to exist in the unemployment rates in Hungary and Poland.
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