Effects of Asymmetric Adjustment Among Labor Productivity,Labor Demand,and Exchange Rate Using Threshold Cointegration Test |
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Abstract: | This paper investigates the asymmetric equilibrium relationship among labor productivity, labor demand, and the exchange rate in Taiwan's manufacturing industry using a threshold cointegration test that allows asymmetric adjustment. The findings show that there is a temporal delay in the reaction of labor demand to change in labor productivity, and vice versa. However, a temporal impact of exchange rate shock on labor demand and labor productivity is statistically unobvious. A trade-off between productivity growth and employment growth is not found. |
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Keywords: | momentum threshold autoregressive process threshold autoregressive process threshold error correction |
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