Sunday, October 11, 2009: 9:20 AM
The dynamics of Spanish unemployment in the last thirty years has
been characterized by a high and persistent unemployment period (from
1982 to 1999) and by two transition periods, one of massive employment
destruction (from 1972 to 1982) and one of massive employment
creation (from 1999 to 2007). This behavior is well captured by a nonlinear
smooth transition autoregressive (STAR) model and the analysis
in this paper indicates the existence of two regimes with a fast transition
between them: a high regime with an equilibrium value of unemployment
of 18.3% and a low regime with a equilibrium value of 7.6%.