Will the (German) NAIRU Please Stand Up?
This paper deals with a critical assessment of the 'non-accelerating inflation rate of unemployment' (NAIRU) for Germany. There are quite a few obstacles to perceiving the NAIRU as an easy-to-use analytical instrument: the possibility of a non-vertical Phillips curve, the occurrence of shocks and hysteresis effects, and the (mis-)measurement of important variables, cointegration issues and a time variability of the NAIRU. A new attempt is made to estimate a NAIRU for Germany using direct measures of inflationary expectations. However, by any method, the NAIRU is very hard to determine and subject to considerable arbitrariness. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2005.
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Volume (Year): 6 (2005)
Issue (Month): 2 (05)
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