www.gospodarkanarodowa.sgh.waw.pl DOI: 10.33119/GN/105519 Gospodarka narodowa p-ISSN: 0867-0005 e-ISSN: 2300-5238 1(297)/2019, 135–149 Andrzej PISULEWSKI* The Dynamics of Unemployment in Poland from 1992 to 2017 1 Abstract: This article examines two approaches to the dynamics of unemployment in Poland. The frst approach is based on the theory of a natural rate of unemployment. Under this theory, the economy can depart from the natural rate of unemployment in the short term due to nominal shocks, but in the long term the economy is expected to achieve an equilib- rium indicated by the natural rate of unemployment. The second approach to the dynam- ics of unemployment is the so-called hysteresis of unemployment theory. According to this theory, all shocks to unemployment will have a permanent effect on the natural rate of unemployment. Testing these two theories amounts to testing stationarity of the series. If the unemployment rate is a non-stationary series with a unit root, then the hysteresis-in-un- employment hypothesis has to be accepted. On the other hand, if the unemployment rate is a stationary series then the hysteresis hypothesis is rejected in favour of the natural rate theory. In the study, the rate of unemployment in Poland is analysed in the period from 1992 (Q2) to 2017 (Q4). Threshold autoregressive model applied to the data indicates that the unemployment rate in Poland is a nonlinear process and, therefore, supports the hys- teresis of unemployment theory. Keywords: unemployment, hysteresis, threshold autoregression model, unit root tests JEL classifcation codes: C22, J64 Article submitted April 25, 2018, accepted for publication January 16, 2019. * University of Agriculture in Kraków, Institute of Economic and Social Sciences, Department of Economics and Economic Policy; e-mail: andrzej.pisulewski@gmail.com 1 The research was supported by the Polish Ministry of Science and Higher Education using funds for statutory activities by young researchers. The author would like to thank the anonymous reviewers for their helpful comments and suggestions.