You are here

Working Paper Series no. 342: Measuring the NAIRU: a complementary approach, Marie-Elisabeth de la Serve and Matthieu Lemoine (en anglais)

Abstract

Estimates of the Nairu generally suffer from a large uncertainty, which can be reduced by adopting a bivariate framework and assuming that shifts of the Phillips curve share a common trend with the unemployment rate. We consider in this paper if this common trend assumption is empirically relevant or not for seven economies over the sample 1973-2010. First, it appears that the Nairu can substantially differ from the unemployment trend. Second, relaxing the common trend assumption improves the fit of the inflation equation. Third, this assumption is necessary for getting an important reduction of uncertainty in a bivariate framework.

Marie-Elisabeth de la Serve et Matthieu Lemoine
September 2011

Classification JEL : C32, E31, E24

Keywords : Nairu, inflation, incertitude

Download the PDF version of this document

publication
Working Paper Series no. 342: Measuring the NAIRU: a complementary approach, Marie-Elisabeth de la Serve and Matthieu Lemoine (en anglais)
  • Published on 09/01/2011
  • EN
  • PDF (957.45 KB)
Download (EN)

Updated on: 06/12/2018 10:56