nairu

[14] Even so, the estimated nairu is still about one percentage point above the current unemployment rate, yet inflation has not risen.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

Milton Friedman, also a Nobel laureate in economics, and E.S. Phelps developed the nairu theory in the late 1960s, and it caught hold during the ensuing decade, in part because of the severe inflation and inept monetary policy of the 1970s.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

Gordon finds that the nairu has varied considerably over time, rising steeply in the 1960s, remaining high from about 1970 to 1990, and then falling sharply.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

The nairu is also called by some economists the "natural" rate of unemployment, a label that Solow thinks "intends deliberately to claim more for that state of the economy than anyone has ever seriously argued it deserves."

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

That such advice should be necessary, or considered "radical," shows the undue influence of the theory of the "nairu" — the nonaccelerating inflation rate of unemployment.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

The nairu is basically the lowest unemployment rate the country can have without inflation continuously increasing.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999

If you don't allow for the oil price shocks of the 1970s, for example, the basic Phillips curve relationship appears to show that inflation and unemployment increase at the same time, and the nairu appears smaller than it actually is.

He's Got the Whole World in His Hands Alcaly, Roger E. 1999