Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277298 
Authors: 
Year of Publication: 
2014
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 11 [Issue:] 2 [Year:] 2014 [Pages:] 136-148
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
This paper argues that the natural rate of unemployment hypothesis, in which equilibrium unemployment is determined by 'structural' variables alone, is wrong: it is both implausible and inconsistent with the evidence. Instead, equilibrium unemployment is haunted by hysteresis. The curious history of the natural rate hypothesis is considered, curious because the authors of the hypothesis thought hysteresis to be relevant. The various methods that have been used to model hysteresis in economic systems are outlined, including the Preisach model with its selective, erasable memory properties. The evidence regarding hysteresis effects on output and unemployment is then reviewed.
Subjects: 
unemployment
natural rate hypothesis
hysteresis
JEL: 
B22
C60
E12
E24
E31
N01
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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