Validity of the unemployment hysteria hypothesis, the Phillips curve and Okun's Law: The case of OECD countries

According to the Hysteria Hypothesis, the natural unemployment rate automatically follows the current unemployment rate. In the natural unemployment rate hypothesis, it has been suggested that the natural level of unemployment rates will not change in the face of shocks in the economy, in other words, temporary shocks in the economy will cause a temporary effect on the natural rate of unemployment (Papell et al., 2000: 310). In contrast, in the hysteria approach to unemployment developed by Blanchard and Summers (1986, 1987), Cross (1987), Barro (1988) and Layard et al (1991), the current period unemployment rates depend on the unemployment rates of the previous period and the shocks in the economy, It has been argued that it has a permanent effect on unemployment rates. Hysteria thesis for Turkey by level of education here Taking a path valid? What is the periodic effect of hysteria? Is the cumulative Hysteria effect valid? Have the conjunctural fluctuations caused permanent unemployment and changed the natural unemployment rate? The answers of these questions will be tried to be solved in our thesis.