AN ANALYSIS FOR UNEMPLOYMENT HYSTERESIS IN G7 COUNTRIES

Abstract

The main purpose of this study is to test whether there is a Hysteresis effect on the total unemployment rate variable in G7 countries by using time series econometric techniques for the 1984-2019 period for the G7 countries. Whether there is a hysterical effect on the unemployment rate or not has been revealed by testing the stability of the unemployment rate variable. According to the unit root test results, it was concluded that there is a hysteria effect in unemployment in G7 countries. In this context, it is concluded that the shocks encountered for the unemployment rate variable have permanent effects on the natural unemployment rate, and the unemployment rate variable follows a non-stationary course around an average that changes according to time.