Template-Type: ReDIF-Paper 1.0
Author-Name: Juan Carlos Cuestas
Author-Name: Javier Ordóñez
Title: Unemployment and common smooth transition trends in Central and Eastern European Countries
Abstract: In the present paper we analyse the existence of common nonlinear trends in several of Central and Eastern European Countries in order to gain some insight about the degree of labour market integration within the area. In order to do so, we test for the order of integration of the unemployment rates, by applying the Leybourne et al. (1998) and Kapetanios et al. (2003) nonlinear unit root tests. Our results pinpoint the fact that five up to eight unemployment rates are stationary around a nonlinear trend and, by means of Anderson and
Vahid (1998) approach, we also find that there is a common trend that drives the long run behaviour of that variable in these countries.
File-URL: http://www.ntu.ac.uk/__data/assets/pdf_file/0008/310211/Unemployment-and-common-smooth-transistion-trends.pdf
File-Format: Application/pdf
File-Function: First version, 2009
Creation-Date: 2009-07
Classification-JEL: C32, E24
Keywords: Unemployment, Central and Eastern Europe, unit roots, smooth transition,
nonlinearities.
Handle: RePEc:nbs:wpaper:2009/5