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IS UNEMPLOYMENT HYSTERESIS HYPOTHESIS VALID FOR FRANCE, GERMANY AND TURKEY UNIT ROOT ANALYSIS WITH STRUCTURAL BREAK

Abstract
Unemployment today is no longer just one of the biggest macro-economical problems of certain countries but one of the main problems for the whole world. Unemployment is growing daily and becoming a global concern. It is now not only a problem of economy but a matter of various social dimensions. One of the most important reasons why unemployment has become a global issue is without a doubt neo-liberal policies. These policies suggest that the countries with protective policies could bring about economic growth and minimize unemployment by abandoning their policies and adopting free trade. However, it's been seen that these countries failed to solve the issue of unemployment despite their economic growth. In this study, validity of unemployment hysteresis had been studied to be determined in France, Germany and Turkey in between years of 1980 and 2017. According to results of ZA with structural break and LM unit roots test with one and two breaks, existence of hysteresis effect had been accepted in unemployment in France, Germany and Turkey. Detecting the presence of unit roots in this series in France, Germany and Turkey have been hysteresis effect in unemployment. A number of constructive and suggestive recommendations have been made in the discussion and comment section in the final part of the study to overcome this unemployment hysteresis effect.

Keywords
Unit Root Tests with Structural Break, Unemployment Hysteresis, France, Germany, Turkey