Estimating persistence in Canadian unemployment: evidence from a Bayesian ARFIMA
The degree of persistence in aggregate Canadian unemployment is estimated within a Bayesian ARFIMA class of models. The results conclude that unemployment exhibits persistence in the short and intermediate run. The evidence of persistence is stronger than previously reported by Koustas and Veloce (1996). This persistence cast a vital implication regarding disinflation policies, Based on the unemployment rate, these policies will prove very costly in terms of lost output and – if implemented – they considerably lengthen recessions.
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Document Type: Research Article
Department of Economics, College of Business Administration, University of Central Florida, 4000 Central Florida blvd., Orlando, FL 32816, USA
Center for Human Resource Research, Ohio State University, 921 Chatham Lane, Suite 100 Columbus, OH 43221, USA
Department of Economics, McGill University, 855 Sherbrooke St. West, Montreal, Quebec, H3A 2T7, Canada
Publication date: 2006-08-20
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