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Linear and nonlinear analysis for testing the hysteresis hypothesis in Türkiye

Year 2024, , 181 - 191, 31.01.2024
https://doi.org/10.25287/ohuiibf.1384757

Abstract

Unemployment is an important socioeconomic problem. Economic shocks especially affect the economies of developing countries negatively. The hysteresis hypothesis expresses the view that temporary shocks can have a permanent effect on unemployment rates. The hysteresis hypothesis can be considered as an objection to the natural rate hypothesis. From a unit root perspective, if the series contain a unit root, hysteresis hypothesis is valid. If not, hysteresis hypothesis is not valid. This study aims to test the hysteresis hypothesis by using data covering the period of 2014M01-2023M07 in the Turkish economy. In the study, general unemployment and youth unemployment rates have been discussed. Some of the most commonly used linear and nonlinear unit root tests in applied studies have been included in the study in order to make comparisons. By detecting that the series are nonstationary according to linear and nonlinear unit root tests, it can be inferred that hysteresis hypothesis is valid in Türkiye. This shows that the effects of shocks are permanent. Effective policies against unemployment need to be developed.

References

  • Ağazade, S. (2016). Türkiye İçin İşsizlik Histerisine Karşın Doğal Oran Hipotezinin Doğrusal Dışı Yöntemlerle Sınanması. Sosyal Güvenlik Dergisi, 6(2), 28-46.
  • Awolaja, O. G., Yaya, O. S., Ogbonna, A. E., Joseph, S. O. & Vo, X. V. (2021). Unemployment hysteresis in Middle East and North Africa countries: panel SUR-based unit root test with a Fourier function, Middle East Development Journal, 13:2, 318-334, DOI: 10.1080/17938120.2021.1958587
  • Bahmani-Oskooee, M., Chang, T. & Ranjbar, O. (2018). Testing hysteresis effect in U.S. state unemployment: new evidence using a nonlinear quantile unit root test, Applied Economics Letters, 25:4, 249-253, DOI: 10.1080/13504851.2017.1316477
  • Blanchard, O. J. & Summers, L. H. (1986). Hysteresis in Unemployment, (No.2035), National Bureau of Economic Research Working Paper Series, 1-12.
  • Blanchard, O.J. & Summers, L.H. (1986). Hysteresis and the European Unemployment Problem. Fischer, S. (ed.) NBER Macroeconomics Annual, Cambridge, MIT Press.
  • Bolat, S., Tiwari, A.K. & Erdayi, A.U. (2014). Unemployment hysteresis in the Eurozone area: evidences from nonlinear heterogeneous panel unit root test, Applied Economics Letters, 21:8, 536-540, DOI: 10.1080/13504851.2013.872755
  • Chang, T., Lee, K-C., Nieh, C-C. & Wei, C-C. (2005). An empirical note on testing hysteresis in unemployment for ten European countries: panel SURADF approach, Applied Economics Letters, 12:14, 881-886, DOI: 10.1080/13504850500365871
  • Dickey, D.A. & W.A. Fuller (1979). Distribution of the Estimators for Autoregressive Time Series with a Unit Root, Journal of the American Statistical Association, 74, p. 427–431.
  • Gomes, F. & da Sılva, C. G. (2008). Hysteresis vs. natural rate of unemployment in Brazil and Chile, Applied Economics Letters, 15(1), 53-56.
  • Gustavsson, M. & Osterholm, P. (2006). Hysteresis and nonlinearities in unemployment rates, Applied Economics Letters, 13(9), 545-548.
  • Gustavsson, M. & Osterholm, P. (2007). Does unemployment hysteresis equal employment hysteresis? The Economic Record, 83(261), 159–173.
  • Kapetanios, G., Shin, Y. & Snell, A. (2003). Testing for a Unit Root in the Nonlinear STAR Framework, Journal of Econometrics, 112, 359–379.
  • Kenny S. V. (2019). A causal relationship between unemployment and economic growth, MPRA Paper 93133, University Library of Munich, Germany.
  • Kilic, E., Yavuz, E., Ergen, E. & Yarasir Tulumce, S. (2023). Asymmetric persistence and the unemployment hysteresis question in emerging markets: evidence from advanced quantile unit-root tests, Studies in Economics and Econometrics, 47:3, 244-261, DOI: 10.1080/03796205.2023.2208742
  • Lin, C. H., Kuo, N. F. & Yuan, C. D. (2008). Nonlinear vs. nonstationary of hysteresis in unemployment: evidence from OECD economies, Applied Economics Letters, 15:6, 483-487, DOI: 10.1080/13504850600706370
  • Mota, P. R. & Vasconcelos, P. B. (2022). Hysteresis in the Dynamics of Employment by Activity Sector, Review of Political Economy, DOI: 10.1080/09538259.2022.2105139
  • Omay, T., Ozcan, B. & Shahbaz, M. (2020). Testing the hysteresis effect in the US state-level unemployment series, Journal of Applied Economics, 23:1, 329-348, DOI: 10.1080/15140326.2020.1759865
  • Özcan, B. (2012). İşsizlik Histerisi Hipotezi Oecd Ülkeleri İçin Geçerli Mi? Yapısal Kırılmalı Birim Kök Analizi, Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, (40), ss. 95-117

Türkiye'de histeri hipotezinin test edilmesine yönelik doğrusal ve doğrusal olmayan analiz

Year 2024, , 181 - 191, 31.01.2024
https://doi.org/10.25287/ohuiibf.1384757

Abstract

İşsizlik önemli bir sosyoekonomik sorundur. Ekonomik şoklar özellikle gelişmekte olan ülke ekonomilerini olumsuz etkilemektedir. Histeri hipotezi, geçici şokların işsizlik oranları üzerinde kalıcı bir etkiye sahip olabileceği görüşünü ifade etmektedir. Histeri hipotezi doğal oran hipotezine bir itiraz olarak değerlendirilebilir. Birim kök açısından bakıldığında seri birim kök içeriyorsa histeri hipotezi geçerlidir. Aksi takdirde histeri hipotezi geçerli değildir. Bu çalışma, Türkiye ekonomisinin 2014M01-2023M07 dönemini kapsayan verileri kullanarak histeri hipotezini test etmeyi amaçlamaktadır. Çalışmada genel işsizlik ve genç işsizlik oranları ele alınmıştır. Uygulamalı çalışmalarda sık kullanılan doğrusal ve doğrusal olmayan birim kök testlerinden bazılarına karşılaştırma yapılabilmesi amacıyla çalışmada yer verilmiştir. Doğrusal ve doğrusal olmayan birim kök testlerine göre serilerin durağan olmadığı tespit edilerek Türkiye'de histeri hipotezinin geçerli olduğu sonucuna varılabilmektedir. Bu da şokların etkilerinin kalıcı olduğunu göstermektedir. İşsizliğe karşı etkili politikaların geliştirilmesi gerekmektedir.

References

  • Ağazade, S. (2016). Türkiye İçin İşsizlik Histerisine Karşın Doğal Oran Hipotezinin Doğrusal Dışı Yöntemlerle Sınanması. Sosyal Güvenlik Dergisi, 6(2), 28-46.
  • Awolaja, O. G., Yaya, O. S., Ogbonna, A. E., Joseph, S. O. & Vo, X. V. (2021). Unemployment hysteresis in Middle East and North Africa countries: panel SUR-based unit root test with a Fourier function, Middle East Development Journal, 13:2, 318-334, DOI: 10.1080/17938120.2021.1958587
  • Bahmani-Oskooee, M., Chang, T. & Ranjbar, O. (2018). Testing hysteresis effect in U.S. state unemployment: new evidence using a nonlinear quantile unit root test, Applied Economics Letters, 25:4, 249-253, DOI: 10.1080/13504851.2017.1316477
  • Blanchard, O. J. & Summers, L. H. (1986). Hysteresis in Unemployment, (No.2035), National Bureau of Economic Research Working Paper Series, 1-12.
  • Blanchard, O.J. & Summers, L.H. (1986). Hysteresis and the European Unemployment Problem. Fischer, S. (ed.) NBER Macroeconomics Annual, Cambridge, MIT Press.
  • Bolat, S., Tiwari, A.K. & Erdayi, A.U. (2014). Unemployment hysteresis in the Eurozone area: evidences from nonlinear heterogeneous panel unit root test, Applied Economics Letters, 21:8, 536-540, DOI: 10.1080/13504851.2013.872755
  • Chang, T., Lee, K-C., Nieh, C-C. & Wei, C-C. (2005). An empirical note on testing hysteresis in unemployment for ten European countries: panel SURADF approach, Applied Economics Letters, 12:14, 881-886, DOI: 10.1080/13504850500365871
  • Dickey, D.A. & W.A. Fuller (1979). Distribution of the Estimators for Autoregressive Time Series with a Unit Root, Journal of the American Statistical Association, 74, p. 427–431.
  • Gomes, F. & da Sılva, C. G. (2008). Hysteresis vs. natural rate of unemployment in Brazil and Chile, Applied Economics Letters, 15(1), 53-56.
  • Gustavsson, M. & Osterholm, P. (2006). Hysteresis and nonlinearities in unemployment rates, Applied Economics Letters, 13(9), 545-548.
  • Gustavsson, M. & Osterholm, P. (2007). Does unemployment hysteresis equal employment hysteresis? The Economic Record, 83(261), 159–173.
  • Kapetanios, G., Shin, Y. & Snell, A. (2003). Testing for a Unit Root in the Nonlinear STAR Framework, Journal of Econometrics, 112, 359–379.
  • Kenny S. V. (2019). A causal relationship between unemployment and economic growth, MPRA Paper 93133, University Library of Munich, Germany.
  • Kilic, E., Yavuz, E., Ergen, E. & Yarasir Tulumce, S. (2023). Asymmetric persistence and the unemployment hysteresis question in emerging markets: evidence from advanced quantile unit-root tests, Studies in Economics and Econometrics, 47:3, 244-261, DOI: 10.1080/03796205.2023.2208742
  • Lin, C. H., Kuo, N. F. & Yuan, C. D. (2008). Nonlinear vs. nonstationary of hysteresis in unemployment: evidence from OECD economies, Applied Economics Letters, 15:6, 483-487, DOI: 10.1080/13504850600706370
  • Mota, P. R. & Vasconcelos, P. B. (2022). Hysteresis in the Dynamics of Employment by Activity Sector, Review of Political Economy, DOI: 10.1080/09538259.2022.2105139
  • Omay, T., Ozcan, B. & Shahbaz, M. (2020). Testing the hysteresis effect in the US state-level unemployment series, Journal of Applied Economics, 23:1, 329-348, DOI: 10.1080/15140326.2020.1759865
  • Özcan, B. (2012). İşsizlik Histerisi Hipotezi Oecd Ülkeleri İçin Geçerli Mi? Yapısal Kırılmalı Birim Kök Analizi, Erciyes Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, (40), ss. 95-117
There are 18 citations in total.

Details

Primary Language English
Subjects Microeconomics (Other)
Journal Section Articles
Authors

Fatma İdil Baktemur 0000-0003-2455-5898

Publication Date January 31, 2024
Submission Date November 1, 2023
Acceptance Date December 30, 2023
Published in Issue Year 2024

Cite

APA Baktemur, F. İ. (2024). Linear and nonlinear analysis for testing the hysteresis hypothesis in Türkiye. Ömer Halisdemir Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 17(1), 181-191. https://doi.org/10.25287/ohuiibf.1384757
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