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- Title
Unemployment in Africa: A Fractional Integration Approach.
- Authors
Caporale, Guglielmo Maria; Gil‐Alana, Luis Alberiko
- Abstract
Abstract: This paper estimates long‐memory models to analyse the stochastic behaviour of unemployment in eleven African countries (Botswana, Ethiopia, Ghana, Kenya, Malawi, Mauritius, Nigeria, Senegal, South Africa, Tanzania and Zambia) from the 1960s until 2010. The empirical results provide very strong evidence of lack of mean reversion in all series under examination. This suggests that hysteresis models are the most relevant for the African experience (not surprisingly, given the rigidities in their labour markets). Therefore in such countries shocks hitting the unemployment series will have permanent effects, and policy makers should take appropriate action to reverse the effects of negative shocks.
- Subjects
AFRICA; UNEMPLOYMENT; MEAN reversion theory; HYSTERESIS (Economics); ECONOMIC shock; STOCHASTIC analysis
- Publication
South African Journal of Economics, 2018, Vol 86, Issue 1, p76
- ISSN
0038-2280
- Publication type
Article
- DOI
10.1111/saje.12178