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The NAIRU and Classical Unemployment in the OECD Countries

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  • Jakob Madsen

Abstract

Using panel data for the OECD countries over the period 1960-93 this paper estimates the NAIRU, tests the restrictions implied by the NAIRU and estimates the extent to which the NAIRU is able to explain the low frequency movements in unemployment. The results indicate that the long-run restrictions imposed on the NAIRU are not satisfied for many countries and that the NAIRU is unable to account for the low frequency movements in unemployment.

Suggested Citation

  • Jakob Madsen, 1998. "The NAIRU and Classical Unemployment in the OECD Countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(2), pages 165-185.
    • Handle: RePEc:taf:irapec:v:12:y:1998:i:2:p:165-185
    DOI: 10.1080/02692179800000001
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    References listed on IDEAS

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    1. Malcolm C. Sawyer, 1983. "Business Pricing and Inflation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-03166-5, December.
    2. Jeffrey Sachs, 1986. "High Unemployment in Europe: Diagnosis and Policy Implications," NBER Working Papers 1830, National Bureau of Economic Research, Inc.
    3. Madsen, J.B., 1996. "The constant term fallacy in estimates of the NAIRU," Discussion Paper Series In Economics And Econometrics 9649, Economics Division, School of Social Sciences, University of Southampton.
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    Cited by:

    1. Groth, Christian & Madsen, Jakob B., 2016. "Medium-term fluctuations and the “Great Ratios” of economic growth," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 149-176.
    2. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, July.
    3. PLASMANS, Joseph & MEERSMAN, Hilde & VAN POECK, André & MERLEVEDE, Bruno, 1999. "Generosity of the unemployment benefit systern and wage flexibility in EMU: Time- varying evidence in five countries," Working Papers 1999043, University of Antwerp, Faculty of Business and Economics.

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