Hysteresis vs. natural rate of unemployment in Brazil and Chile
0147-5479 / 1471-6445
Augusto Reis Gomes, Fabio/0000-0001-9918-9445
Gomes, Fábio Rodrigues
Silva, Cleomar Gomes da
This article examines the hysteresis hypothesis in the unemployment rates of Brazil and Chile using an LM unit root test with two endogenous breaks. The phenomenon is confirmed for both countries. However, the hysteresis hypothesis is able to account for only a small part of the unemployment evolution.