Publication:
The Causes of Spanish Unemployment: A Structural VAR Approach

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URI: https://hdl.handle.net/10016/3274
ISSN: 0014-2921
DOI: 10.1016/S0014-2921(97)00058-5
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causes_unemployement_EER_1997_ps.pdf (1.59 MB)
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1997-07
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Elsevier
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Abstract
In this paper, we review the main causes of Spanish unemployment and weight them by estimating a simple macroeconomic model using the structural VAR methodology. By using this methodology we associate different causes of unemployment with shocks of different nature which have long-lasting effects due to full hysteresis. We claim that such an extreme assumption on ?state dependency? is reasonable, at least as a local approximation, for the period and the economy at hand. Our results suggest that the combination of a plausible mixture of different types of shock and extreme persistence in their propagation mechanisms can satisfactorily explain the dismal performance of the Spanish labour market during the last two decades.
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Unemployment, Hysteresis, Structural VAR
Bibliographic citation
European Economic Review, 1997, 41, 7, p. 1281-1307
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