ANALYSIS OF THE NEGATIVE AND POSITIVE IMPACT OF INSTITUTIONAL FACTORS ON UNEMPLOYMENT IN VISEGRAD COUNTRIES

Abstract

The objective of this analysis is to examine the relationship between indicators of V4 member states and selected institutional factors of the labour market. In addition, the study aims to extend Sekhon’s standard model of inflation by incorporating institutional factors. For the estimation of the NAIRU in V4 countries, the Kalman filter method is applied with a higher-than-usual smoothing coefficient. The model is designed to identify specific periods in which institutional factors exert either a positive or negative effect on the unemployment rate in individual countries. Finally, the analysis of the nature and intensity of these effects aims to indicate the scope for broader application of institutional factors by economic policymakers, while also warning against the risk of overusing those factors that may negatively affect the development of both structural and cyclical unemployment.

Data:
Received: 26 Mar 2019
Revised: 14 May 2019
Accepted: 6 Jun 2019
Published: 20 Jun 2019