Empirical estimates of the NAIRU
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Empirical estimates of the NAIRU. / Madsen, Jakob Brøchner.
In: LABOUR, Vol. 19, No. 4, 2005, p. 563-593.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Empirical estimates of the NAIRU
AU - Madsen, Jakob Brøchner
N1 - JEL Classification: E24, E31
PY - 2005
Y1 - 2005
N2 - Empirical studies have found that the non-accelerating inflation rate of unemployment (NAIRU) has been fluctuating in OECD countries around a constant mean of several percentage points over the past decades. This mean is calculated from the constant terms carried over from the wage and price growth equations. In this paper it is shown that a high proportion of the constant term is a statistical artefact and suggests a new method which yields approximately unbiased estimates of the time-invariant NAIRU. Using data for OECD countries it is shown that the constant-term correction lowers the unadjusted time-invariant NAIRU by approximately half
AB - Empirical studies have found that the non-accelerating inflation rate of unemployment (NAIRU) has been fluctuating in OECD countries around a constant mean of several percentage points over the past decades. This mean is calculated from the constant terms carried over from the wage and price growth equations. In this paper it is shown that a high proportion of the constant term is a statistical artefact and suggests a new method which yields approximately unbiased estimates of the time-invariant NAIRU. Using data for OECD countries it is shown that the constant-term correction lowers the unadjusted time-invariant NAIRU by approximately half
KW - Faculty of Social Sciences
KW - NAIRU
KW - Phillips curve
U2 - 10.1111/j.1467-9914.2005.00307.x
DO - 10.1111/j.1467-9914.2005.00307.x
M3 - Journal article
VL - 19
SP - 563
EP - 593
JO - Labour
JF - Labour
SN - 1121-7081
IS - 4
ER -
ID: 91885