Validity of Unemployment Hysteresis in European Countries and Türkiye with Fourier Functions

Authors : Serhat Alpağut

Pages : 780-790

Doi:10.29023/alanyaakademik.1463030

View : 101 | Download : 141

Publication Date : 2024-09-30

Article Type : Research Paper

Abstract :Unemployment hysteresis means that rising unemployment does not return to the average over time. This situation underlines that unemployment in countries is not temporary but permanent. In the case of unemployment hysteresis, economists argue for intervention in the economy. The existence of unemployment hysteresis is therefore important for the applicability of economic policy. This issue, which is very important for economists, has been analyzed in the literature using different methods. In this study, we use the analyses obtained by adding the recently popular Fourier models to unit root tests. The Flexible Fourier ADF (FF-ADF) test developed by Enders and Lee (2012) and the Fractional Frequency Flexible Fourier ADF (FFFF-ADF) test developed by Omay (2015) are used to investigate the existence of unemployment hysteresis in Türkiye and EU countries. As a result, it is found that the Fourier properties are statistically significant for both Türkiye and the EU and that the series have nonlinear properties. As a result of the tests applied, there is evidence that unemployment hysteresis does not valid for Türkiye and the EU.
Keywords : İşsizlik Histerisi, Doğal İşsizlik Oranı, Fourier Birim Kök Testleri