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CEP discussion paper
Capital Mobility and Unemployment Dynamics: Evidence from a Panel of OECD Countries
Giovanna Vallanti
April 2005
Paper No' CEPDP0684:
Full Paper (pdf)

JEL Classification: E24; E32; F15; F21

Tags: unemployment persistence; unemployment volatility; international capital flows; oecd countries

We use a panel of 20 OECD countries over a 30-year period to estimate the implications of international capital mobility for unemployment. We find that the increase in capital flows since the mid1980s has contributed to an amplification of the impulse response of unemployment to country-specific shocks and to a fall in the persistence of unemployment in response to the same shocks.