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Structural Determinants of the Natural Rate of Unemployment in Canada

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  • David T. Coe

    (International Monetary Fund)

Abstract

Empirical estimates are presented of the policy and structural determinants of the natural rate of unemployment in Canada. The structural features of the economy that impinge on the adjustment of real wages to their equilibrium level are discussed, and estimates are presented showing how the generosity of the unemployment insurance system is related to past levels of unemployment. The empirical results indicate that government policies have been largely responsible for changes in the natural rate, and, hence, they can contribute to a reduction in the natural rate in the medium term.

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.

Volume (Year): 37 (1990)
Issue (Month): 1 (March)
Pages: 94-115

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Handle: RePEc:pal:imfstp:v:37:y:1990:i:1:p:94-115

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References

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  1. Lindbeck, Assar & Snower, Dennis J, 1988. "Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach," American Economic Review, American Economic Association, vol. 78(1), pages 167-88, March.
  2. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," Working papers 427, Massachusetts Institute of Technology (MIT), Department of Economics.
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Cited by:
  1. Cote, D. & Hostland, D., 1996. "An Econometric Examination of the Trend Unemployment Rate in Canada," Working Papers 96-7, Bank of Canada.
  2. Cousineau, Jean-Michel, 1991. "L’effet du salaire minimum sur le chômage des jeunes et des femmes au Québec : une réestimation et un réexamen de la question," L'Actualité Economique, Société Canadienne de Science Economique, vol. 67(2), pages 144-165, juin.
  3. Claar, Victor V, 2002. "Is the NAIRU More Useful in Forecasting Inflation than the Natural Rate of Unemployment?," MPRA Paper 14257, University Library of Munich, Germany.
  4. Stephen S. Poloz, . "The Causes of Unemployment in Canada: A Review of the Evidence," Working Papers 94-11, Bank of Canada.
  5. Robert A. Amano & Tony S. Wirjanto, . "An Empirical Investigation into Government Spending and Private Sector Behaviour," Working Papers 94-8, Bank of Canada.
  6. Adams, Charles & Coe, David T., 1989. "A Systems Approach to Estimating the Natural Rate of Unemployment and Potential Output for the United States," MPRA Paper 8622, University Library of Munich, Germany.
  7. Pichette, Lise, 1998. "La politique monétaire a-t-elle des effets asymétriques sur l'emploi?," Working Papers 98-17, Bank of Canada.
  8. Beatriz Rodríguez Prado, 1995. "La tasa natural de desempleo en la economía española: un intento de cuantificación," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 3, pages 133-151, Junio.
  9. Stephen S. Poloz, 1995. "The Causes of Unemployment in Canada: A Review of the Evidence," Macroeconomics 9502002, EconWPA.

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