Abstract: In the literature, the unemployment rate has been explained by two hypotheses: the natural rate hypothesis vs. the hysteresis hypothesis. The former hypothesis refers to the rate of unemployment towards which the economy naturally gravitates in the long run. The latter hypothesis refers to the long-lasting effects of shocks on the unemployment rate. We test these two competing hypotheses using conventional unit root tests on the US unemployment rate at the state level and provide empirical evidence for both the hysteresis and the natural rate hypotheses. We then explain why reconciliation of opposite views regarding the unemployment rate is unlikely.
Why Economists Disagree: An Illustration of Irreconcilability Using the US State
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A brilliant quote from the paper
"This implies that if a variable, in our case the unemployment rate, is nonstationary, it cannot be stationary at the same time and vice versa. This fact, thus far, has not been even identified in the unit root literature."
I leave this for your entertainment.
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I bet this is hari luitelA brilliant quote from the paper
"This implies that if a variable, in our case the unemployment rate, is nonstationary, it cannot be stationary at the same time and vice versa. This fact, thus far, has not been even identified in the unit root literature."
I leave this for your entertainment.
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Luitel himself made an appearance at the end of this thread: https://www.econjobrumors.com/topic/why-most-published-results-on-unit-root-and-cointegration-are-false
He’s unhinged. Gerry Mahar, meanwhile, looks like the football coach took a wrong turn and they just assumed he knew econ.