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A Model for Estimation of NAIRU Extended by Demand Shocks and its Application to Business Cycle Analysis in the Labour Market in Hungary and Poland

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  • Emilie Jasova

    (University of Economics)

Abstract

Article seeks to extend the Standard Gordon's " Triangle " model with demand shocks. The demand shocks are represented by a newly derived Current discount indicator (CDI). The recession on the labour market in Hungary and Poland was influenced by the growth of future consumption preferences of consumers. Negative gaps of unemployment increased during the recession only in Hungary. Short period subsequent boom in Hungary is linked with excessive pessimism of consumers what reduced unemployment positive gap and shortened the period with positive gape. In Poland the negative vision of future development in the economy resulted in shortening the period of boom. Policymakers should create more positive expectations and prevent to transfer negative emotions on the labour market.

Suggested Citation

  • Emilie Jasova, 2014. "A Model for Estimation of NAIRU Extended by Demand Shocks and its Application to Business Cycle Analysis in the Labour Market in Hungary and Poland," Proceedings of Economics and Finance Conferences 0401788, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:0401788
    as

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    References listed on IDEAS

    as
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    4. Mr. Jaromir Benes & Mr. Papa M N'Diaye, 2004. "A Multivariate Filter for Measuring Potential Output and the NAIRU Application to the Czech Republic," IMF Working Papers 2004/045, International Monetary Fund.
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    7. James Tobin & Sergio Parrinello & Paolo Sylos Labini, 1999. "Supply Constraints on Employment and Output: NAIRU Versus Natural Rate," Palgrave Macmillan Books, in: Giancarlo Gandolfo & Ferruccio Marzano (ed.), Economic Theory and Social Justice, chapter 1, pages 35-62, Palgrave Macmillan.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Unemployment gap; psychological factor; Kalman Filter; Phillips Curve; NAIRU;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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