OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

 

The Concept, Policy Use and Measurement of Structural Unemployment

Estimating a Time Varying NAIRU Across 21 OECD Countries You or your institution have access to this content

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Author(s):
Pete Richardson, Laurence Boone, Claude Giorno1, Mara Meacci, David Rae1, David Turner1
Author Affiliations
  • 1: OECD, France

Publication Date
22 June 2000
Bibliographic information
No.:
250
Pages
76
DOI
10.1787/785730283515

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The structural rate of unemployment and associated non-accelerating inflation rate of unemployment (the NAIRU) are of major importance to the analysis of macro and structural economic developments, although in practice these concepts are not well defined and there is considerable uncertainty and controversy concerning their measurement and policy use. The present paper reviews a range of conceptual and analytical issues and related empirical studies to examine the usefulness and limitations of such concepts. A reduced-form Phillips curve approach is found the most suitable conceptual framework for representing the NAIRU as currently used by the OECD in its policy analysis and surveillance work. Three distinct classes of NAIRU concept are identified, distinguished by the time-frame in which they are defined, which map directly into the broad requirements for macro and structural policy analysis. In line with a number of recent empirical studies, this general approach is applied ...

Keywords:
OECD, unemployment, Phillips curve, NAIRU, Kalman filter
JEL Classification:
  • C13: Mathematical and Quantitative Methods / Econometric and Statistical Methods and Methodology: General / Estimation: General
  • C22: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
  • C32: Mathematical and Quantitative Methods / Multiple or Simultaneous Equation Models; Multiple Variables / Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
  • E24: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
  • E31: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Price Level; Inflation; Deflation