Hysteresis in Mexico: A PANIC approach
José Luis de la Cruz Gallegos, Carlos Alberto Marín Hernández, José Ángel Alcántara Lizárraga

Nowadays the study of unemployment rates is particularly important as a result of the unusual increase of this variable in recent years. In this way, it is essential to develop specialized and effective public policies focused on reducing this trend. This research analyses the presence of hysteresis in Mexico through the application of PANIC method (Panel Analysis of non stationarity in idiosyncratic and common components) for thirty-two states including Mexico City. The results suggest the presence of hysteresis in the common components of the series as well as in some of the idiosyncratic errors specific to each state.

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