Hysteresis and sluggishness in Portuguese unemployment, 1977–88

descriptionPublicationkeyboard_double_arrow_right Article 01 Jan 1993 Portugal English Publisher:Informa UK LimitedJournal:International Review of Applied Economics, volume 7, pages 197-207 (issn: 0269-2171, eissn: 1465-3486,

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Authors: Modesto, Leonor; Neves, João César das;

doi: 10.1080/758530147

Hysteresis and sluggishness in Portuguese unemployment, 1977–88

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Abstract

The phenomenon of unemployment persistence led to the development of alternative theories of unemployment. Among these the ‘hysteresis’ concept by Blanchard and Summers (1987) received a wide interest. Based on this notion we developed a generalized model that nests Blanchards and Summers’ theory. Using this framework we conducted an empirical investigation for the Portuguese labour market (1977–88). The results obtained point towards the existence of labour demand sluggishness, wage inertia and unemployment hysteresis. The model also suggests the existence of a rather inelastic labour demand curve.

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Portugal

Related Organizations

Universidade Católica Portuguesa
Portugal

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