NAIRU: Non-Accelerating Inflation Rate of Unemployment
This measure is called NAIRU, non-accelerating inflation rate of unemployment
; by definition, unemployment rates above (below) NAIRU are associated with accelerating (decelerating) inflation.
and x is a vector of observed explanatory variables, being the non-accelerating inflation rate of unemployment
(NAIRU), the percentage of years of a left-wing government (WLEFT), the variance of output growth (VPROD), and the compensation of employees as share of GDP (SLOPE) measured in deviation from their means
Ninety percent of their book, Reducing Unemployment: A Case for Government Deregulation, contains conservative neoclassical orthodoxy on the reasons for unemployment and how the "non-accelerating inflation rate of unemployment
" might be reduced.
Indeed, this impressive inflation performance has been achieved despite an unemployment rate of 5.5 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).(1) Is this expansion an aberration, or evidence of structural economic change?
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
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
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
. That is, there is a jobless rate at which inflation would be neither increasing nor falling.
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 NAIRU is like a speed limit for the economy, for if the economy grows so fast that unemployment falls below the NAIRU, inflation tends to rise.
The function for estimating the non-accelerating inflation rate of unemployment
(NAIRU) has been incorrectly formulated.
The key to that model is what economists call the non-accelerating inflation rate of unemployment
, the point beyond which further reductions in unemployment tend to trigger inflation, and beyond which central bankers tend to get interest-rate happy.