This study analyses asymmetries in the dynamic relationship between unemployment and the business cycle in the UK and the US. Unemployment rates present clear unconditional asymmetry in both countries. Markov switching regime models with two regimes also display clear asymmetries and show that,...

This study analyzes the relationship between unemployment and the business cycle in the UK and the US. For both economies, a strong and definite association is found that shows that cyclical shocks extend their effect on unemployment over several quarters. This association is much more intense...