Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261533 
Authors: 
Year of Publication: 
2019
Citation: 
[Journal:] Journal of Economic Structures [ISSN:] 2193-2409 [Volume:] 8 [Issue:] 30 [Publisher:] Springer [Place:] Heidelberg [Year:] 2019 [Pages:] 1-21
Publisher: 
Springer, Heidelberg
Abstract: 
Distant past experience of economic performance is hypothesized to govern long-run employment performance across 28 European Union (EU) state members. Economic studies usually include lag structure for causality analysis, such as the Wold causal chain and recursive vector autoregression. The inquiry of this paper is different from the literature for two reasons: first, it intends to explain theoretically and empirically how long an influence of significant economic experience in the distant past on long-run unemployment would last. Second, the focus is on the EU due to the ongoing debate over economic integration and independent economies, of which Brexit is one prominent example. Based on panel data, a diagrammatic theory conveys the meaning of the distant past economic experience and its relationship with long-run unemployment in the EU. Empirical investigations include causality tests and long-lasting economic influences, where a new simple approach toward Cholesky decomposition is also demonstrated. The effect of an unexpected shock to inflation on unemployment can remain literally substantive for up to nearly four decades, while unemployment effects of some trade-related innovations can last even longer. The results are supported using analogical reasoning of macroeconomic behaviors incorporated in the original concept of this research.
Subjects: 
Analogical reasoning
European Union
Future prosperity
Infation
Past experience
Unemployment
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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