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Small system modelling of real wages, inflation, unemployment and output per capita in Italy 1970-1994

Small system modelling of real wages, inflation, unemployment and output per capita in Italy 1970-1994
Small system modelling of real wages, inflation, unemployment and output per capita in Italy 1970-1994
The relationships between real wages, output per capita, inflation and unemployment in Italy between 1970 and 1994, are modelled using a cointegrated vector autoregression. There is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables, probably associated with the substantial changes in many sectors of the Italian economy after 1979. Alternative ways to model structural change in the Italian labour market are considered. In adopting a split sample approach the results favour an hysteresis interpretation of unemployment.
regime shifts, forecasting, cointegration, real wages, infation, unemployment, output gap
106
University of Southampton, Department of Economics
Marcellino, Massimiliano
7eabfbac-19e9-47e0-9db5-e29cb4b134ba
Mizon, Grayham E.
2b8353b4-0af4-48db-b552-6867dc1f4583
Marcellino, Massimiliano
7eabfbac-19e9-47e0-9db5-e29cb4b134ba
Mizon, Grayham E.
2b8353b4-0af4-48db-b552-6867dc1f4583

Marcellino, Massimiliano and Mizon, Grayham E. (2000) Small system modelling of real wages, inflation, unemployment and output per capita in Italy 1970-1994 Southampton, UK. University of Southampton, Department of Economics 23pp. (Discussion Papers in Economics and Econometrics, 106)

Record type: Monograph (Discussion Paper)

Abstract

The relationships between real wages, output per capita, inflation and unemployment in Italy between 1970 and 1994, are modelled using a cointegrated vector autoregression. There is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables, probably associated with the substantial changes in many sectors of the Italian economy after 1979. Alternative ways to model structural change in the Italian labour market are considered. In adopting a split sample approach the results favour an hysteresis interpretation of unemployment.

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More information

Published date: 2000
Keywords: regime shifts, forecasting, cointegration, real wages, infation, unemployment, output gap

Identifiers

Local EPrints ID: 33100
URI: https://eprints.soton.ac.uk/id/eprint/33100
PURE UUID: 6d327523-72c8-4692-b3f9-1070ec107681

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Date deposited: 18 May 2006
Last modified: 17 Jul 2017 15:54

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Contributors

Author: Massimiliano Marcellino
Author: Grayham E. Mizon

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