Abstract
This paper investigates the statistical features and the macroeconomic determinants of youth unemployment in a number of European countries. First, it explores its short and long memory properties by estimating both autoregressive and fractional integration. This analysis sheds light on the degree of persistence of the series, and on whether policy actions are required for highly persistent series. Second, it investigates the main determinants of youth unemployment in Europe by estimating fractional cointegration models. The evidence suggests that this series is highly persistent in all the countries examined, and that in some of them there is a significant long-run equilibrium relationship linking it to macroeconomic variables such as GDP and inflation.
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Notes
These countries also display orders of integration above 1 in the univariate analysis.
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Acknowledgements
We are grateful to MisbahTanveer Choudhry, Enrico Marelli and Marcello Signorelli for kindly supplying the data set used in this paper. Comments from the Editor and an anonymous referee are also gratefully acknowledged. The first-named author gratefully acknowledges financial support from a Marie Curie International Research Staff Exchange Scheme Fellowship within the 7th European Community Framework Programme under the project IRSES GA-2010-269134, and the second-named author from the Ministry of Economy of Spain (ECO2011-2014 ECON Y FINANZAS, Spain).
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Caporale, G., Gil-alana, L. Youth Unemployment in Europe: Persistence and Macroeconomic Determinants. Comp Econ Stud 56, 581–591 (2014). https://doi.org/10.1057/ces.2014.29
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DOI: https://doi.org/10.1057/ces.2014.29