Non-Accelerating Inflation Rate of Unemployment


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Non-Accelerating Inflation Rate of Unemployment

Also called NAIRU. The unemployment rate in an economy below which inflation will begin to rise. The idea behind NAIRU states that a certain unemployment rate is built in to an economy. If unemployment falls too far, the economy will begin to overheat and inflation will rise. This analysis is highly controversial; some economists hold full employment is possible without these negative side effects. Milton Friedman was a major proponent of the NAIRU idea. See also: Phillips curve.
References in periodicals archive ?
NAIRU: Non-Accelerating Inflation Rate of Unemployment
5 percent - lower than current estimates of the rate considered to be consistent with maintaining stable prices (the non-accelerating inflation rate of unemployment, or NAIRU).
A further difficulty of applying the OECD production function technique to derive potential output for New Zealand is that it relies on estimates of the Non-Accelerating Inflation Rate of Unemployment (NAIRU).
This can in turn reduce wage pressure and reduce the non-accelerating inflation rate of unemployment, explaining both the high rates of return on capital and the low degree of labour market pressure.
by lowering the so-called non-accelerating inflation rate of unemployment (NAIRU).
The reason for using the jobless rate as an important indicator in setting interest rate policy is the concept of the natural rate of unemployment, and the related measure known as the NAIRU--the non-accelerating inflation rate of unemployment.
The current state of the inflation-unemployment tradeoff is often summarized in a statistic called the NAIRU, an ugly acronym that stands for the non-accelerating inflation rate of unemployment.
The function for estimating the non-accelerating inflation rate of unemployment (NAIRU) has been incorrectly formulated.

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