Unemployment and the European Union, 2000–2017: structural exploration of distant past economic experience and future prosperity

Yong, Enn Lun (2019) Unemployment and the European Union, 2000–2017: structural exploration of distant past economic experience and future prosperity. Journal of Economic Structures, 8 (30). pp. 2-21.

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Abstract

Distant past experience of economic performance is hypothesized to govern long-run employment performance across 28 European Union (EU) state members. Economic studies usually include lag structure for causality analysis, such as the Wold causal chain and recursive vector autoregression. The inquiry of this paper is different from the literature for two reasons: first, it intends to explain theoretically and empirically how long an influence of significant economic experience in the distant past on longrun unemployment would last. Second, the focus is on the EU due to the ongoing debate over economic integration and independent economies, of which Brexit is one prominent example. Based on panel data, a diagrammatic theory conveys the meaning of the distant past economic experience and its relationship with long-run unemployment in the EU. Empirical investigations include causality tests and long-lasting economic influences, where a new simple approach toward Cholesky decomposition is also demonstrated. The effect of an unexpected shock to inflation on unemployment can remain literally substantive for up to nearly four decades, while unemployment effects of some traderelated innovations can last even longer. The results are supported using analogical reasoning of macroeconomic behaviors incorporated in the original concept of this research.

Item Type: Article
Uncontrolled Keywords: Analogical reasoning, European Union, Future prosperity, Inflation, Past experience, Unemployment
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Divisions: FACULTY > Faculty of Science and Natural Resources
Depositing User: MDM SITI AZIZAH IDRIS
Date Deposited: 14 Nov 2019 00:17
Last Modified: 18 Apr 2020 14:40
URI: http://eprints.ums.edu.my/id/eprint/24073

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