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dc.contributor.authorKaranassou, Marikaen_US
dc.contributor.authorSala, Hectoren_US
dc.date.accessioned2012-02-09T14:07:45Z-
dc.date.available2012-02-09T14:07:45Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/55210-
dc.description.abstractThe evolution of Spanish unemployment has been quite idiosyncratic. The full-employment levels of the early seventies were followed by unemployment rates that were the highest within the OECD countries in the aftermath of the oil price shocks. While unemployment was extremely persistent in most of the eighties and nineties, it experienced its sharpest decline in recent years. We investigate the determinants of this unemployment trajectory using the analytical framework of the chain reaction theory (CRT). We show that unemployment may not gravitate towards its natural rate due to frictional growth, a phenomenon that arises from the interplay of lagged adjustment processes and growing exogenous variables in a dynamic system with spillovers. The empirical analysis distinguishes four periods: (i) 1978-1985, (ii) 1986-1990, (iii) 1991-1994, (iv) 1995-2005, and finds that capital accumulation is a crucial driving force of unemployment. Thus, our theoretical and empirical results question the key role of the natural rate in policy making.en_US
dc.language.isoengen_US
dc.publisherQueen Mary, Univ. of London, School of Economics and Finance Londonen_US
dc.relation.ispartofseriesWorking Paper // School of Economics and Finance, Queen Mary, University of London 633en_US
dc.subject.jelE22en_US
dc.subject.jelE24en_US
dc.subject.jelJ21en_US
dc.subject.ddc330en_US
dc.subject.keywordlabour market dynamicsen_US
dc.subject.keywordfrictional growthen_US
dc.subject.keywordchain reaction theoryen_US
dc.subject.keywordcapital accumulationen_US
dc.subject.keywordimpulse response functionen_US
dc.subject.stwArbeitslosigkeiten_US
dc.subject.stwVolatilit├Ąten_US
dc.subject.stwInvestitionen_US
dc.subject.stwSpanienen_US
dc.titleThe rise and fall of Spanish unemployment: A chain reaction theory perspectiveen_US
dc.typeWorking Paperen_US
dc.identifier.ppn583815146en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Working Paper Series, School of Economics and Finance, Queen Mary, University of London

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