Talk:NAIRU

Incorrect?

We need to distinguish between the Natural rate concept and NAIRU. So far as I know, "NAIRU" was a term introduced in the 1980s. I will look this up. So far as I am aware, but need to check, the first people to use the term were Nickell and Layard. I thinl the Historical stuff in this page should really go on the natural rate page?Byronmercury (talk) 19:15, 28 July 2012 (UTC)

PS the guys who used the term "NAIRU" were certainly NOT monetarists. They were new Keynesian for the most part.Byronmercury (talk) 19:17, 28 July 2012 (UTC)

Actual values

I've been trying to search for actual estimations of the current NAIRU with little success. I know it used to be published in CBO's The Budget and Economic Outlook, but it's absent this year. Can anyone help with this and put it in the article?

<<To the poster above: This is an article about the NAIRU as a concept, not about the NAIRU in a particular country! Wikipedia is not just American.

To the responder: The article is missing values for ANY country.87.247.51.148 (talk) 02:57, 8 June 2018 (UTC)

RE: last sentence

Monetary policy should not and will never aim stabilizing the inflation rate at 0%, because this would, after hyperinflation and stagflation, the worst any one could do. With an inflation rate og 0% there wouldnt be any economic growth. For one reason because production would never get any cheaper nor more efficient in terms of productivity, because employers cannot lower nominal wage rates, since workers wouldnt accept. Through inflation the decrease in the real wage can be camouflaged by i.e. a rise of nominal wage (+1%) at an inflation rate of 2%, so in the end the worker is left with a 1% loss of purchasing power, which doesnt bother him too much since his paycheck figures are higher than last period anyway. Also if an inflation rate decrease is caused i.e by a hike of interest rate, it would basically eliminate investments, which causes decreasing aggregate demand , which in effect would lead to rising unemployment and Happy Birthday there s your recession parfait. Inflation should be held as stable as possible somewhere between 2-3%, like the Bank of England/UK does with a possibilty of inflation rate variation between 2-3%, trying to reach an inflation rate of 2,5% from either above or below, which gives the banking system more flexibility concerning interest rate changes etc.

You assumed constant productivity (widgets per labor hour) here, which is (hopefully) not true. After all, new techniques and tools get invented from time to time.--Whichone 17:20, 11 April 2006 (UTC)

The above long unsigned paragraph mixes up short- and long-run issues, and tells little - if anything - about what the optimal rate of inflation is in the long run. A subject professional economists have no ready-made and universally accepted answer for. However, it is safe to say that most agree that any long-run correlation between inflation and productivity growth is hard to establish statistically.--HJ 21:25, 18 July 2006 (UTC)

Citing other encyclopedia

I do not thing that citing other encylopedia is appropriate. Encyclopedia can not be appropriate source itself. —Preceding unsigned comment added by 213.164.125.199 (talk) 19:34, 25 November 2007 (UTC)

Yes it can. Wikipedia even has a citation template for citing encyclopedias. -- JHP (talk) 05:19, 11 September 2009 (UTC)

Is this the same as natural rate of unemployment?

Is it? natural rate of unemployment - Fresheneesz (talk) 21:38, 5 March 2009 (UTC)

no it is not. — Preceding unsigned comment added by 2A02:908:1A3:5080:993A:AF4E:41A8:F18A (talk) 20:47, 6 July 2017 (UTC)

Contradiction?

There appears to be a contradiction or lack of sufficient context in the following:
(Intro:2nd Sentence)"...Actual unemployment cannot fall below the NAIRU,..."
(Properties of the NAIRU:1st Postulate)if U < U* for a few years, inflationary expectations rise, so that the inflation rate tends to accelerate;
--ArtdelveLA (talk) 22:02, 7 March 2009 (UTC)

NIARU/NAIRU

If I recall right I had added both acronyms - as a pointer to the use of both elsewhere. Was that removed?

Can any explain?

John courtneidge (talk) 20:35, 27 July 2009 (UTC)

Does not have to be unemployment?

Why is there no mention of the Job Guarantee? The govt employs people at a fixed wage of £x\hour, uses employment to control inflation. If inflation is too high shift to JG buffer stock not unemployed. No need for unemployment. Think laterally! Plus unemployed will retain skills and shire jobs eliminated. Then you can repeal labour market regulations, etc. 90.217.167.67 (talk) 22:32, 30 June 2015 (UTC)

Dr. Stockhammer's comment on this article

Dr. Stockhammer has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:

section "The natural rate hypothesis and the NAIRU" downplays the difference between natural rate and NAIRU. The NAIRU describes involuntary unemployment, the natural rate (in Friedman) a misperception unemployment.

Snowden, B, Vane, H, Wynarczyk, P, 1994. A Modern Guide to Macroeconomics: An Introduction to Competing Schools of Thought. Northampton, MA: Edward Elgar

paragraph on unemployment hysteresis is correct but limited. The case for unemployment hysteresis if much broader. In particular it has been shown that the existence of wage norms, i.e. that actual wages or wages of co-workers influence target wages (Skott 2005, Stockhammer 2011). Skott, Peter, 2005. Fairness as a source of hysteresis in employment and relative wages. Journal of Economic Behavior and Organization 57, 305-31

There is also an extensive empirical literature that questions the explanatory power of labour market institution for explaining unemployment and the NAIRU. Howell, Baker, Glyn and Schmitt, “Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence,” Capitalism and Society, Vol. 2, Issue 1 (2007). Baccaro, L., Rei, D. (2007): Institutional determinants of unemployment in OECD countries: does the deregulatory view hold water?, in: International Organization 61, 527-569. Stockhammer, E., Klär, E., (2011): Capital accumulation and unemployment in the medium run, in: Cambridge Journal of Economics, 35, 437–457

section Relationship to other economic theories conflates the policy recommendations that many think tanks (e.g. the OECD in its famous Jobs Study 1994) have derived from the NAIRU theory with the NAIRU model itself. The NAIRU model is a Keynesian model in that the labour market determines nominal wage growth whereas employment is determined by the goods market. If an exogenous NAIRU is assumed (the natural rate hypothesis), then in the long run labour market institutions determine unemployment and Keynesian policies are ineffective. However, if the NAIRU is endogenous, for which there is substantial evidence, then there is unemployment hysteresis the NAIRU determines short term inflation. Demand management can then affect unemployment (e.g. Ball 2009, Stockhammer 2011)

We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.

Dr. Stockhammer has published scholarly research which seems to be relevant to this Wikipedia article:

• Reference : Engelbert Stockhammer & Erik Klar, 2008. "Capital Accumulation, Labour Market Institutions, and Unemployment in the Medium Run," Discussion Papers of DIW Berlin 834, DIW Berlin, German Institute for Economic Research.

ExpertIdeasBot (talk) 18:12, 27 June 2016 (UTC)

Figures

Nowhere in this article is there any suggestion of what this "optimal" rate of unemployment might be for a typical developed economy. Surely this is a serious omission? — Preceding unsigned comment added by 2.97.163.17 (talk) 10:50, 25 February 2017 (UTC)