Perspectives of Innovations, Economics and Business

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Volume 3
Issue 3
Online publication date 2009-12-07
Title Underlying trends in employment-output equation: the case of Jordan
Author Arqam Al-Rabbaie, Ahmad Alwaked, Yaseen Altarawneh
Abstract
The underlying employment trend (UET) is investigated in Jordanian economy over the period 1989- 2004 using structural time series model (STSM). This approach allows to modelling the trend in its stochastic form introduced by Harvey (1989).  The results show that a stochastic trend is preferred to deterministic trend. In addition, the inclusion or exclusion of the conventional deterministic trend leads to overestimated output elasticity. Furthermore, the UET is found to be non-linear, down downward sloping.   
Citation
References
Central Bank of Jordan (CBJ), Annual report,  Different issues

Department of Statistics (DOS), Statistical Year Book, Jordan, different issues

Harvey, A., 1989. Forecasting, structural time series models and the Kalman filter, Cambridge University Press, Cambridge

Harvey, A., 1997. “Trend, cycles and autoregression”, The Economic Journal 107 (440), pp.192-201

Harvey, A., Henry, S., Wren-Lewis, S., 1986. “Stochastic trend in dynamic regression models: An application to the employment-output equation”, The Economic Journal, 96 (384), pp.975-85

Harvey, A., Koopman, S., 1992. “Diagnostic checking of unobserved components time series models”, Journal of Business and Economic Statistics 10 (4), pp.377-89. 

Hendry, D., Juselius, K., 2000. “Explaining cointegration analysis: Part I”, Energy Journal, International Association for Energy Economics, Vol.21, pp.1-42

Hendry, D., Juselius, K., 2001. “Explaining cointegration analysis: Part II”, Energy Journal, International Association for Energy Economics, Vol.22, pp.75-120

Henry, S., 1979. “Employment equations for the U.K.”, Paper presented to the SSRC Econometric Modelling Group LSE

Koopman, S., Harvey, A., Doornik, J. and Shephard, N., 2000. Stamp: structural time series analyser, modeller and predictor, London: Timberlake Consultants Press

O’Brien, P., 1983. Employment in systematic econometric comparison. London: NIESR

Keywords Employment, stochastic trend, structural time series modelling
DOI http://dx.doi.org/10.15208/pieb.2009.47
Pages 35-37
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