The Research On The Phenomenon Of Unemployment Hysteresis Based On Panel Unit Root Test Allowing For Structural Breaks

Employment has come to the foreground in national life,and the unemployment rate accompanied by it has always been the most important subject in macroeconomic research.Whether unemployment hysteresis exists or not will directly affect the national macroeconomic policy regulation and control.There are many ways to judge whether there is unemployment hysteresis.One of them is unit root test.With the popularity of non-stationary Econometrics,more and more researchers are focusing on the study of panel unit root tests.With the propose of “ Perron appearance”,as a result of structure breaks,original testing method will characterized by pool size and power..Most macroeconomic data are affected by special policies or events,there will be some structural mutations,so it is very important for researchers to take structural mutations into account in the process of panel unit root test.Three main work of this paper are as follows:(1)This paper are focused on the size and power of CIPS panel unit root tests method by Monte Carlo Simulations,in case of level changes or slop changes in Finite Sample.(2)According to its performance in the case of structural changes,we take account of structural breaks in the study of panel unit root tests,in order to obtain the potential effects on test performance derived from structural changes.Monte Carlo simulation results shows that,the improved CIPS test method has better size and power than the original method.(3)We take new CIPS*-test method to test unemployment panel data from 28 provinces and regions in China improved by bootstrap method,in order to check for the existence of unemployment hysteresis.The empirical studies show that unemployment hysteresis does exist in China on the whole,which shows obviously in Eastern and Central Regions,with absence of significant affect in Western and Northeast Region.