Unemployment Hysteresis in African Oil Exporting Countries: Evidence from Fourier Unit Root Test
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 06
Abstract
This study investigates the stochastic properties of unemployment rate in top ten African oil exporting countries, by examining whether the high unemployment rate in these countries are mean reverting or non-stationary. Using annual data spanning between 1991 and 2023, the study employs a battery of unit root tests, namely, Classical ADF, Fourier ADF (FADF), ADF with Structural Break (ADF-SB) and Fourier ADF with Structural Break (FADF-SB) to test which of the hypothesis of unemployment (natural rate hypothesis, hysteresis hypothesis and structural slump hypothesis) do the unemployment behaviours in African oil exporting countries actually belong to. Findings from the study reveal the superior functionality of FADF-SB over the other unit root tests, stemming from the ability of the ADF model laced with both Fourier and Structural Break to revert the high unemployment rates of all the reviewed countries to equilibrium. Based on the findings in this study, it is therefore concluded that the characteristics of unemployment rate in African oil exporting countries align with and support the structural slump hypothesis of unemployment and thereby recommended that the structural factors should be modelled in the unemployment trend of their economies.
Authors and Affiliations
Saliu Mojeed Olanrewaju
Keywords
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- EP ID EP738116
- DOI 10.47191/jefms/v7-i6-50
- Views 49
- Downloads 0
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