scholarly journals On the Non-Inflationary effects of Long-Term Unemployment Reductions

2021 ◽  
Author(s):  
Walter Paternesi Meloni ◽  
Davide Romaniello ◽  
Antonella Stirati
Keyword(s):  
Unemployment Rate ◽  
Inflation Rate ◽  
Oecd Countries ◽  
Conventional Wisdom ◽  
Policy Implications ◽  
New Keynesian ◽  
Local Projections

The paper critically examines the New Keynesian explanation of hysteresis based on the role of long-term unemployment. We first examine its analytical foundations, according to which rehiring long-term unemployed individuals would not be possible without accelerating inflation. Then we empirically assess its validity along two lines of inquiry. First, we investigate the reversibility of long-term unemployment. Then we focus on episodes of sustained long-term unemployment reductions to check for inflationary effects. Specifically, in a panel of 25 OECD countries (from 1983 to 2016), we verify by means of local projections whether they are associated with inflationary pressures in a subsequent five-year window. Two main results emerge: i) the evolution of the long-term unemployment rate is almost completely synchronous with the dynamics of the total unemployment rate, both during downswings and upswings; ii) we do not find indications of accelerating or persistently higher inflation during and after episodes of strong declines in the long-term unemployment rate, even when they occur in country-years in which the actual unemployment rate was estimated to be below a conventionally estimated Non-Accelerating Inflation Rate of Unemployment (NAIRU). Our results call into question the role of long-term unemployment in causing hysteresis and provide support to policy implications that are at variance with the conventional wisdom that regards the NAIRU as an inflationary barrier.

scholarly journals Explaining Protectionism Support: The Role of Economic Factors

2013 ◽  
Vol 2013 ◽  
pp. 1-14 ◽  
Author(s):  
Natalia Melgar ◽  
Juliette Milgram-Baleix ◽  
Máximo Rossi
Keyword(s):  
Free Trade ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Easy Access ◽  
Economic Factors ◽  
Trade Theory ◽  
Small Countries ◽  
Policy Measures

We find that individuals’ opinions concerning protectionist policies match with how their revenue could be affected in the medium or long term by trade liberalisation in line with predictions of the comparative advantage models. An adverse macroeconomic context (large increase in the unemployment rate or inflation rate) increases protectionist attitudes, thus reflecting that people do not trust that free trade will lead to lower prices or create jobs despite trade theory optimism. People share a mercantilist view of trade since more imports increase protectionism support, while people positively value exports, especially in small countries. Regarding policy measures, while protectionist measures do not influence protectionism support in general, easy access to exports reduces people’s support for protectionism.

scholarly journals Can the insider–outsider theory explain unemployment hysteresis in OECD countries?

2019 ◽  
Vol 72 (1) ◽  
pp. 149-163
Author(s):  
Dimitrios Bakas ◽  
Yousef Makhlouf
Keyword(s):  
Labour Market ◽  
Empirical Evidence ◽  
Unemployment Rate ◽  
Unit Root ◽  
Oecd Countries ◽  
Unit Root Tests ◽  
Panel Unit Root Tests ◽  
Panel Unit Root ◽  
Hysteretic Behaviour

Abstract Insider–outsider theory is often used as a basis for explaining the hysteretic behaviour of unemployment. Despite this, there is no empirical evidence about the validity of this theory on explaining the persistence of unemployment. This article addresses this gap, using various labour market proxies of insiders’ power for the OECD countries over 1960–2013 and employing panel unit root tests that exploit the information contained in these proxies. The results show that although the unemployment rate exhibits a pronounced hysteretic behaviour in OECD countries, this behaviour is reversed once we account for the insider–outsider proxies. Our findings thus validate the role of the insider–outsider theory as a key source of unemployment hysteresis.

Compassion in Contemporary Social Policy: Applications of Virtue Theory

2011 ◽  
Vol 41 (2) ◽  
pp. 251-269 ◽  
Author(s):  
MARY ELIZABETH COLLINS ◽  
KATE COONEY ◽  
SARAH GARLINGTON
Keyword(s):  
Social Policy ◽  
Policy Implications ◽  
Community Settings ◽  
Virtuous Action ◽  
Environment Policy ◽  
Social Sciences And Humanities ◽  
Policy Debates ◽  
The Social

AbstractCurrent academic debate in the social sciences and humanities is revisiting the role of virtue in civic life. This debate is relevant to social policy. We argue that virtue is already an implicit component of policy debates, but that the virtue of compassion has not received sufficient emphasis. To support our argument we review classical and contemporary arguments regarding virtue and its linkage to the ‘good society’; articulate the necessity of compassion and its application to specific policies areas (e.g., domestic violence, welfare, emergency care); and assess how compassion intersects with other virtues in the policy environment. Policy implications are identified including: recognition of the realities of suffering, the need for sufficient administrative infrastructure and trained professionals and an often long-term commitment to work in community settings. Weighing the risks, and the overall challenges of virtuous action, our analysis suggests compassion remains a compelling, yet under-utilised, basis for constructing and implementing policies.

scholarly journals PENGARUH VARIABEL MAKRO EKONOMI TERHADAP PERTUMBUHAN EKONOMI INDONESIA TAHUN 2015-2019

2021 ◽  
Vol 2 (2) ◽  
pp. 88-99
Author(s):  
Feby Kinanda
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Unemployment Rate ◽  
Trade Balance ◽  
Inflation Rate ◽  
Short Term ◽  
Negative Effect ◽  
The Exchange Rate ◽  
Positive Effect

This study aims to analyze the effect of macroeconomic variables including the open unemployment rate, trade balance, inflation rate and the rupiah exchange rate against the dollar on Indonesian economic growth by using the ECM error correction model approach to see the long-term and short-term relationships that influence macro variables on economic growth. , in the long term the open unemployment rate variable, the trade balance, the inflation rate have a negative effect while the exchange rate has a positive effect, while in the short term the open unemployment rate, the inflation rate and the exchange rate have a negative effect while the trade balance has a positive effect.   Keywords: Economic Growth, Open Unemployment Rate, Trade Balance, Inflation, Exchange Rate

scholarly journals Monetary policy and unemployment in the Republic of Serbia

Industrija ◽  
2020 ◽  
Vol 48 (2) ◽  
pp. 73-88
Author(s):  
Nevena Veselinović
Keyword(s):  
Monetary Policy ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Vector Error Correction ◽  
Vector Error ◽  
Vec Model ◽  
Long Run ◽  
Key Policy ◽  
The Republic

The main aim of the examination is to conclude whether monetary policy can influence the unemployment rate through the key policy rate and to analyze the fundamental linkages among inflation and unemployment in the Republic of Serbia, considering that those mentioned occurrences are major destabilizers of the developing economy. The Vector error correction model is used as the central model for inquiring the structure of the time series. From the cointegration equation of the VEC model, it can be concluded that there is no long-run equilibrium dynamic between the key policy rate and the unemployment rate in the Republic of Serbia over the period 2009M1-2019M6. Regarding the relationship between inflation and unemployment, there is a positive statistically significant effect of the inflation rate to the unemployment rate in the long-term. In the short term, results indicate that the key policy rate, as well as the inflation rate, do not cause the unemployment rate in the observed period.

The Financial Development of Portuguese Entrepreneurial Businesses

2016 ◽  
pp. 1-19
Author(s):  
Inna Sousa Paiva
Keyword(s):  
Financial Development ◽  
Small Businesses ◽  
Service Providers ◽  
Policy Implications ◽  
Entrepreneurial Firms ◽  
Financial Strategy ◽  
Policy Makers ◽  
The Family

Entrepreneurial firms commonly become family small businesses. This study aims to highlight the financial strategy underlying the development of smaller family companies. A brief introduction about the definition and role of the family business is followed by a review of the debate on the finance gap that puts constraints on the survival and long-term growth and prosperity of smaller privately companies. Evidence is drawn from a database of smaller firms with family owner-managers in Portugal, in order to determine their attitudes towards and experiences of venture capital and financing and other capital options. We conclude by discussing some tentative policy implications for regional development from the perspective of owner managers, service providers and policy-makers.

scholarly journals Assessing inflation in CR using artificial intelligence

2021 ◽  
Vol 129 ◽  
pp. 03034
Author(s):  
Marek Vochozka ◽  
Tomas Krulicky ◽  
Lenka Novotna
Keyword(s):  
Unemployment Rate ◽  
Inflation Rate ◽  
Value Added ◽  
The Czech Republic ◽  
Macroeconomic Indicators ◽  
Short Run ◽  
National Bank ◽  
The Relationship ◽  
Rate Development

Research background: Unemployment and inflation are among the basic macroeconomic indicators of the national economy. Both these phenomena are inextricably linked to market economy and have undisputable social and economic impacts on the population of the countries where these processes take place. The relationship between the inflation and unemployment can be expressed by means of Philips curve. Purpose: The objective of the research is to compile Philips’s curve for the years 2000-2021 and compare the resulting curve with the initial short-run Philips curve. Methods: The validity of the mutual relationship between unemployment and inflation is examined using the method of neural networks. The data on inflation and unemployment rate are available from the period of 31 January 2020 and 28 February 2021. The data on inflation were obtained from the database of the Czech Statistical Office; the data on unemployment, from the official websites of the Czech National Bank. Findings & Value added: During the period under review, unemployment rate and inflation fluctuated constantly. Currently, both variables have stabilized at around 3%. Compared the long-term trend, in the years 2008-2009, the inflation rate was higher than unemployment rate. The analysis performed shows that the actual Philips curve for the Czech Republic in the period under review does not copy the initial short-run Philips curve, which indicates that the prediction of inflation rate development cannot be based on the development of unemployment rate, and the development of inflation rate cannot be a basis for exact prediction of unemployment rate development.

scholarly journals The Role of Controlling Inflation in the Perspective of Al-Qur'an

2019 ◽  
Vol 2 (1) ◽  
pp. 20
Author(s):  
Kuni Zakiyah
Keyword(s):  
Developing Countries ◽  
Inflation Rate ◽  
Economic Policies ◽  
Short Term ◽  
High Inflation ◽  
Stable Economy

The phenomenon of inflation that exists is actually not a short-term phenomenon and occurs situationally. However, like in other developing countries, the problem of inflation is more on the issue of long-term inflation that is increasingly complex and increasingly difficult to control. Conventional economic policies are no longer able to solve this problem. According to the perspective of the Qur'an, the source of the emergence of economic turmoil, which is indicated by high inflation, is due to the use of currencies that deviate from the Qur'an. The deviation is nothing but making the currency a commodity in order to make a profit. The advantage is called by the Qur'an in terms of usury, both usury nasi’ah and fadhl. Therefore, if we want to create a more stable economy, with a more controlled inflation rate, then there must be courage to eliminate the source of the main cause.

scholarly journals Terrorism and Macroeconomy: A Review of The Eurasian Economies

2017 ◽  
Author(s):  
Özge Korkmaz
Keyword(s):  
Unemployment Rate ◽  
Inflation Rate ◽  
Causal Link ◽  
Cointegration Analysis ◽  
Causality Test ◽  
Per Capita Gdp ◽  
Export Rate ◽  
Per Capita ◽  
The Relationship

The relationship between terrorist incidents, inflation rate, unemployment rate, per capita GDP, export rate and import rate for Eurasian countries Ukraine, Moldova, Georgia, Kyrgyzstan, Kazakhstan, Tajikistan, Azerbaijan, Armenia and Belarus for the period 1994-2015. For this purpose, the Westerlund cointegration analysis and have been using the causality test introduced by Holtz-Eakin, Newey and Rosen. As a result of the analyzes, it is observed that there is a long-term relationship between the export rate and the terrorist incidents and the export rate is the reason for the terrorist incidents. At the same time, it has been found that there is no long-term interaction and causal link between all other variables and terrorist incidents considered in the study.

scholarly journals Okun’s Law and Long Term Co-Integration Analysis for OECD Countries (1987-2012)

2016 ◽  
Vol 6 (1) ◽  
pp. 39-46 ◽  
Author(s):  
Bilal Kargı
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Unemployment Rate ◽  
High Growth ◽  
Oecd Countries ◽  
Population Increase ◽  
Okun’S Law ◽  
Okun's Law ◽  
Term Relation

Even though, there are so many so long discussions on the relation between population increase and economic growth, today, general opinion tends to believe that there is a direct relation between population increase and economic growth. This opinion is supported by some empirical studies. Despite an economical growth caused by directly with population growth, it is known that there is a reverse relation between unemployment and growth known as Okun’s Law. This relation, suggesting that every 1 point decrease in unemployment induces a 3 point increase in growth, is tested for many countries. In this study, this hypothesis of Okun is examined and it is found to be true for selected 23 countries, even with the difference in coefficients. At the same time, long term relation between growth and unemployment is tested with the use of time series analysis and long term relation is found for 14 countries. Additionally, tests done for all 34 OECD countries showed that reversed relation between unemployment and growth is valid and they are co-integrated in long run. In this study, countries are categorized according to growth rate as “low”, “normal” and “high” and a consistent unemployment rate for countries with high growth rate could not be seen. In the case of countries with lowest growth rate, generalization that they have quite high unemployment rate can be made.

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