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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

The Structural Change in the Dynamics of U.S. Unemployment: Sectoral Shift Shock and Productivity

Vol.16, No.1, March , 53–71


English Version |  Korean Version
  •   (Department of Economics, Korea University)

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Abstract  

In this paper, we investigate whether the dynamics of the U.S. unemployment has been changed since the early 1980's. In particular, we focus on the changing role of the sectoral shift shocks and the productivity of labor in explaining the unemployment dynamics. First, while the sectoral shift shocks played an important role in the unemployment rate dynamics up to the early 1980's, their importance has decreased considerably after the structural break. Second, while we observe a positive and significant relationship between the labor productivity and unemployment before the structural break, their relationship has been changed in the negative direction after the structural break. These results seem to be affected by the stabilization of the U.S. economy in relation to the changes in the employment of the manufacturing sector and the Fed's monetary policy.


Keywords
   Structural change, Stabilization, Sectoral shift shock, Productivity

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