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AbstractThis paper analyses the implicit dynamics underlying the interest rate structure in Kenya. For this purpose, we use data on four interest rates of commercial banks (deposits, savings, lending and overdraft) together with the 91‐day Treasury Bill rate, for the period July 1991 to August 2010, and apply various techniques based on long‐range dependence and, in particular, on fractional integration. The results indicate that all series examined are nonstationary with orders of integration equal to or higher than 1 when using parametric techniques and slightly smaller than 1 when using semiparametric methods. The analysis of various spreads suggests that lending–savings and deposits–savings are also nonstationaryI(1) variables; however, the spreadsvis‐à‐visthe Treasury Bill rate may be mean reverting if the errors are autocorrelated. The high level of dependence observed in some of these series could be the result of an incorrect interest rate policy, implying the desirability of a policy aimed at reducing interest rate volatility. Copyright © 2014 John Wiley & Sons, Ltd.

This paper examines the degree of persistence of youth unemployment (total, male and female) in twenty-four countries by using two alternative measures: the AR coefficient and the fractional differencing parameter, based on short- and long-memory processes respectively. The evidence suggests that persistence is particularly high in Japan and some EU countries such as Spain, Portugal, Ireland and Finland, where appropriate policy actions are of the essence. Specifically, active labour market policies are necessary to prevent short-term unemployment from becoming structural (long-term).

This paper examines the degree of persistence of youth unemployment (total, male and female) in twenty-four countries by using two alternative measures: the AR coefficient and the fractional differencing parameter, based on short- and longmemory processes respectively. The evidence suggests that persistence is particularly high in Japan and some EU countries such as Spain, Portugal, Ireland and Finland, where appropriate policy actions are of the essence. Specifically, active labour market policies are necessary to prevent short-term unemployment from becoming structural (long-term).