Friday, September 9, 2016

Eurozone unemployment equilibrium

Scott Sumner mentioned Eurozone unemployment today, so I thought I'd give it the treatment in these posts for the US and for vehicle miles driven. Here is the entropy minimization yielding an equilibrium rate of 1.2 percentage points fall in unemployment per year (or 0.1 percentage points per month):


Here are the unemployment bins that capture most falling unemployment:


Fitting to a Fermi-Dirac (logistic) function, gives us transition times of 2003.22 (mid March), 2009.1 (mid February), and 2012.31 (mid April) and the following fit to Eurozone unemployment:


...

Update + 2 hours

Also note that 1.2 percentage points per year in the Eurozone is more than twice as fast as the US rate of 0.5 percentage points per year, making the Eurozone a more dynamic economy -- by this measure, at least.

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