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Introduction to the Policy Forum on the NAIRU

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  • Sarantis Tsiaplias

Abstract

This policy forum examines the Australian NAIRU, a key measure in describing the relationship between labour market slack and inflation, through four complementary lenses. First, Borland and Harris evaluate the RBA's dashboard‐style, narrative approach to gauging labour‐market slack. Second, Ballantyne and Cusbert estimate a state‐space model that points to a current NAIRU near 5% and weaker feedback from past inflation. Third, Gross tests alternative state‐space specifications, clustering the NAIRU in the 4%–5% range and supporting a 4.5% benchmark. Finally, Dawkins and Garnaut propose a pragmatic test: tighten conditions until wage pressure lifts inflation. Together, the papers compare methods, weigh the evidence, and set out the policy trade‐offs in today's NAIRU debate.

Suggested Citation

  • Sarantis Tsiaplias, 2025. "Introduction to the Policy Forum on the NAIRU," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 58(3), pages 222-223, September.
    • Handle: RePEc:bla:ausecr:v:58:y:2025:i:3:p:222-223
    DOI: 10.1111/1467-8462.70032
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    References listed on IDEAS

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    1. Denny Lie, 2024. "The Slope of the Phillips Curve and the Optimal Average Inflation Targeting Window," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(3), pages 283-293, September.
    2. Debdulal Mallick, 2024. "The Phillips Curve in Australia in the Era of Inflation Targeting," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(3), pages 272-282, September.
    3. Sarantis Tsiaplias, 2024. "Introduction to the Policy Forum on the Phillips Curve," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(3), pages 271-271, September.
    4. Tom Cusbert, 2017. "Estimating the NAIRU and the Unemployment Gap," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 13-22, June.
    5. Syed Kanwar Abbas, 2024. "The New Keynesian Phillips Curve and r * ${r}^{* }$," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(3), pages 294-301, September.
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