1 / 16

Disentangling the unemployment rate in the Romanian economy

Disentangling the unemployment rate in the Romanian economy. MSc. student Vlad Muscalu Professor Mois ă Altăr. Introduction. Statistical approaches time series estimations Kalman filter unemployment rate – price growth relationship SVAR model

armine
Download Presentation

Disentangling the unemployment rate in the Romanian economy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Disentangling the unemployment rate in the Romanian economy MSc. student Vlad Muscalu Professor Moisă Altăr

  2. Introduction • Statistical approaches • time series estimations • Kalman filter • unemployment rate – price growth relationship • SVAR model • allows data to determine how demand and supply shocks diffuse over time – employs the most economic theory reasoning

  3. Introduction • Philips curve: • Gordon (1990)

  4. Introduction Plotting a 1998-2007 Philips Curve for the Romanian economy

  5. Data • Consumer price inflation • Registered unemployment rate • Industrial production • Capacity utilization • International oil prices

  6. Adjusting the unemployment series

  7. Adjusting the unemployment series

  8. A Kalman filter approach • The model

  9. A Kalman filter approach • The model

  10. A SVAR approach

  11. A SVAR approach • Imposing long-run restrictions

  12. A SVAR approach • Expected response of unemployment to positive shocks: • Oil shocks ↑ • IS shocks ↓(LR=0) • Technology shocks ?(LR=0) • Unemployment shocks ↑ • LM shocks ↓(LR=0)

  13. A SVAR approach • Expected response of unemployment to positive shocks: • Oil shocks ↑ • IS shocks ↓(LR=0) • Technology shocks ?(LR=0) • Unemployment shocks ↑ • LM shocks ↓(LR=0)

  14. A SVAR approach • Unemployment gap: • NAIRU:

  15. A SVAR approach • SVAR determined NAIRU

  16. Conclusion • The approaches employed to estimate the NAIRU yield diverging results • Both methods imply the unemployment rate has fallen below the NAIRU since mid-2007 • The SVAR approach – which has more economic foundations – suggests the unemployment rate has fallen in excess demand territory for the last 6 years

More Related