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Neues von der NAIRU?

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  • Wolfgang Franz

    ()
    (ZEW Mannheim)

Abstract

This paper is devoted to a new estimation of the non-accelerating inflation rate of unemployment (NAIRU) for the West German Economy 1980 to 1998. The novelty of the paper is the estimation of a time-varying NAIRU for West Germany employing the Kaiman method together with confidence intervals based on the application of a residual based bootstrap. As a result, the NAIRU for 1998 is estimated to lie between 7.9 and 8.5 percent. However, based on a presentation of the theoretical framework and a discussion of serious methodological problems the paper emphasizes several caveats which leave some doubts about the usefulness of the value of NAIRU estimates as guides for economic policy.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 221 (2001)
Issue (Month): 3 ()
Pages: 256-284

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Handle: RePEc:jns:jbstat:v:221:y:2001:i:3:p:256-284

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Keywords: NAIRU; unemployment; inflation;

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References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Franz, Wolfgang & Gordon, Robert J, 1993. "German and American Wage and Price Dynamics: Differences and Common Themes," CEPR Discussion Papers 777, C.E.P.R. Discussion Papers.
  2. Arturo Estrella & Frederic S. Mishkin, 1999. "Rethinking the Role of NAIRU in Monetary Policy: Implications of Model Formulation and Uncertainty," NBER Chapters, in: Monetary Policy Rules, pages 405-436 National Bureau of Economic Research, Inc.
  3. George A. Akerlof & William T. Dickens & George L. Perry, 2000. "Near-Rational Wage and Price Setting and the Long-Run Phillips Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 1-60.
  4. Blanchard, O & Katz, L, 1996. "What We Know and Do Not Know about the Natural Rate of Unemployment," Working papers 96-29, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Gebhard Flaig & Claudia Ploetscher, 2000. "Estimating the Output Gap Using Business Survey Data - A Bivariate Structural Time Series Model for the German Economy," CESifo Working Paper Series 233, CESifo Group Munich.
  6. Thomas Laubach, 2001. "Measuring The NAIRU: Evidence From Seven Economies," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 218-231, May.
  7. Ray C. Fair, 1999. "Does the NAIRU Have the Right Dynamics?," American Economic Review, American Economic Association, vol. 89(2), pages 58-62, May.
  8. Michael Reutter, 2000. "Hysteresis in West German Unemployment Reconsidered," CESifo Working Paper Series 240, CESifo Group Munich.
  9. Robert W. Rich & Donald Rissmiller, 2000. "Understanding the recent behavior of U.S. inflation," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 6(Jul).
  10. Franz, Wolfgang & Gordon, Robert J., 1993. "German and American wage and price dynamics: Differences and common themes," Discussion Papers 2, University of Konstanz, Center for International Labor Economics (CILE).
  11. Fabiani, Silvia & Mestre, Ricardo, 2000. "Alternative measures of the NAIRU in the euro area: estimates and assessment," Working Paper Series 0017, European Central Bank.
  12. DiNardo, J. & Moore, M.P., 1999. "The Phillips Curve is Back? Using Panel Data to Analyze the Relationship Between Unemployment and Inflation in an Open Economy," Papers 99-00-04, California Irvine - School of Social Sciences.
  13. Hans-Joachim Schalk & Jörg Lüschow & Gerhard Untiedt, 1997. "Wachstum und Arbeitslosigkeit : gibt es noch einen Zusammenhang?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 50(17-18), pages 03-14, October.
  14. Mikael Apel & Per Jansson, 1999. "System estimates of potential output and the NAIRU," Empirical Economics, Springer, vol. 24(3), pages 373-388.
  15. Gruen, David & Pagan, Adrian & Thompson, Christopher, 1999. "The Phillips curve in Australia," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 223-258, October.
  16. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
  17. Laxton, Douglas & Rose, David & Tambakis, Demosthenes, 1999. "The U.S. Phillips curve: The case for asymmetry," Journal of Economic Dynamics and Control, Elsevier, vol. 23(9-10), pages 1459-1485, September.
  18. Douglas Staiger & James H. Stock & Mark W. Watson, 1996. "How Precise are Estimates of the Natural Rate of Unemployment?," NBER Working Papers 5477, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Franz, Wolfgang, 2003. "Will the (German) NAIRU Please Stand up?," ZEW Discussion Papers 03-35, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Uwe Hassler & Michael Neugart, 2003. "Inflation-unemployment tradeoff and regional labor market data," Empirical Economics, Springer, vol. 28(2), pages 321-334, 04.
  3. Jacobi, Lena & Kluve, Jochen, 2007. "Before and after the Hartz reforms: The performance of active labour market policy in Germany," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(1), pages 45-64.
  4. Jörg Döpke & Christian Pierdzioch, 2001. "Inflation and the Skewness of the Distribution of Relative Price Changes: Empirical Evidence for Germany," Kiel Working Papers 1059, Kiel Institute for the World Economy.
  5. Andreas Brenck & Arnold Berndt & Karl-Peter Naumann, 2003. "Neues Tarifsystem der Deutschen Bahn: Sinnvolle Preisgestaltung im öffentlichen Verkehr?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 56(16), pages 3-13, 08.
  6. Klaus Abberger & Gebhard Flaig & Wolfgang Nierhaus, 2007. "ifo Konjunkturumfragen und Konjunkturanalyse : ausgewählte methodische Aufsätze aus dem ifo Schnelldienst," ifo Forschungsberichte, Ifo Institute for Economic Research at the University of Munich, number 33, June.
  7. Christoph Knoppik & Thomas Beissinger, 2003. "How Rigid are Nominal Wages? Evidence and Implications for Germany," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(4), pages 619-641, December.
  8. Gebhard Flaig, 2003. "Die Entwicklung der Arbeitslosenquote: Ein langfristiger Vergleich zwischen Deutschland und den USA," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 56(16), pages 14-19, 08.
  9. repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
  10. Beissinger, Thomas, 2003. "Strukturelle Arbeitslosigkeit in Europa : eine Bestandsaufnahme (Structural unemployment in Europe * an inventory)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 411-427.
  11. Wolfgang Pollan, . "Incomes Policies, Expectations and the NAIRU," WIFO Working Papers 433, WIFO.
  12. Quaas, Georg & Klein, Mathias, 2010. "Der Beitrag alternativer NAIRU-Kurven zur Erklärung der Inflation
    [The Contribution of Alternative NAIRU-curves to the Explanation of Inflation]
    ," MPRA Paper 26176, University Library of Munich, Germany.
  13. Linzert, Tobias, 2005. "The Unemployment Inflation Trade-Off in the Euro Area," IZA Discussion Papers 1699, Institute for the Study of Labor (IZA).
  14. Jacobi, Lena & Kluve, Jochen, 2006. "Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany," IZA Discussion Papers 2100, Institute for the Study of Labor (IZA).
  15. repec:iab:iabmit:v:36:i:4:p:411-427 is not listed on IDEAS
  16. Beissinger, Thomas, 2003. "Strukturelle Arbeitslosigkeit in Europa: Eine Bestandsaufnahme," University of Regensburg Working Papers in Business, Economics and Management Information Systems 389, University of Regensburg, Department of Economics.
  17. Schreiber, Sven & Wolters, Jurgen, 2007. "The long-run Phillips curve revisited: Is the NAIRU framework data-consistent?," Journal of Macroeconomics, Elsevier, vol. 29(2), pages 355-367, June.

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