Unemployment rate dynamics in small open economy: The case of Serbia

Dynamic relationship among unemployment rate and key macroeconomic variables is explored for the Serbian economy that has been characterized by high unemployment rates since the outcome of the Great Recession. This analysis reveals how effective policy measures can be in reducing unemployment rate....

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Main Authors: Anić Aleksandra, Mladenović Zorica
Format: Article
Language:English
Published: Economics institute, Belgrade 2020-01-01
Series:Industrija
Subjects:
Online Access:https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2020/0350-03732004007A.pdf
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spelling doaj-6d09d935f29a4cf29c9afb265d89907c2021-01-24T11:16:42ZengEconomics institute, BelgradeIndustrija0350-03732334-85262020-01-014847220350-03732004007AUnemployment rate dynamics in small open economy: The case of SerbiaAnić Aleksandra0https://orcid.org/0000-0002-3058-0777Mladenović Zorica1https://orcid.org/0000-0003-1579-4205University of Belgrade, Faculty of Economics, Belgrade, SerbiaUniversity of Belgrade, Faculty of Economics, Belgrade, SerbiaDynamic relationship among unemployment rate and key macroeconomic variables is explored for the Serbian economy that has been characterized by high unemployment rates since the outcome of the Great Recession. This analysis reveals how effective policy measures can be in reducing unemployment rate. Cointegrated vector autoregressive model is employed for the period 2014-2019. Prior to multivariate dynamic modelling, the validity of hysteresis hypothesis for unemployment rate is assessed. Obtained results show significant negative long-run effect of real wages on unemployment rate, and positive long-run effect of real effective exchange rate appreciation on real wages. For further reduction of unemployment rate demand-side measures should be employed.https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2020/0350-03732004007A.pdfunemploymenthysteresis effectcointegrationvar modeldynamic relationship
collection DOAJ
language English
format Article
sources DOAJ
author Anić Aleksandra
Mladenović Zorica
spellingShingle Anić Aleksandra
Mladenović Zorica
Unemployment rate dynamics in small open economy: The case of Serbia
Industrija
unemployment
hysteresis effect
cointegration
var model
dynamic relationship
author_facet Anić Aleksandra
Mladenović Zorica
author_sort Anić Aleksandra
title Unemployment rate dynamics in small open economy: The case of Serbia
title_short Unemployment rate dynamics in small open economy: The case of Serbia
title_full Unemployment rate dynamics in small open economy: The case of Serbia
title_fullStr Unemployment rate dynamics in small open economy: The case of Serbia
title_full_unstemmed Unemployment rate dynamics in small open economy: The case of Serbia
title_sort unemployment rate dynamics in small open economy: the case of serbia
publisher Economics institute, Belgrade
series Industrija
issn 0350-0373
2334-8526
publishDate 2020-01-01
description Dynamic relationship among unemployment rate and key macroeconomic variables is explored for the Serbian economy that has been characterized by high unemployment rates since the outcome of the Great Recession. This analysis reveals how effective policy measures can be in reducing unemployment rate. Cointegrated vector autoregressive model is employed for the period 2014-2019. Prior to multivariate dynamic modelling, the validity of hysteresis hypothesis for unemployment rate is assessed. Obtained results show significant negative long-run effect of real wages on unemployment rate, and positive long-run effect of real effective exchange rate appreciation on real wages. For further reduction of unemployment rate demand-side measures should be employed.
topic unemployment
hysteresis effect
cointegration
var model
dynamic relationship
url https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2020/0350-03732004007A.pdf
work_keys_str_mv AT anicaleksandra unemploymentratedynamicsinsmallopeneconomythecaseofserbia
AT mladenoviczorica unemploymentratedynamicsinsmallopeneconomythecaseofserbia
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