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Integrating the Empirical Tests of the Natural Rate Hypothesis: A Meta‐Regression Analysis

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  • T. D. Stanley

Abstract

A meta‐analysis of thirty‐four restriction tests from nine studies of the natural rate of unemployment hypothesis (NRU) finds the statistical trace of a false empirical hypothesis. A theme of bias and misspecification among those studies that tend to be more supportive of NRU emerges. When combined with a separate meta‐analysis of NRU's falsifying hypothesis, unemployment ‘hysteresis’ (Stanley 2004a), the natural rate hypothesis may be regarded as empirically ‘falsified’ (Popper 1959). Monte Carlo simulations validate the meta‐regression methods used here to integrate different restriction tests and to identify their limitations.

Suggested Citation

  • T. D. Stanley, 2005. "Integrating the Empirical Tests of the Natural Rate Hypothesis: A Meta‐Regression Analysis," Kyklos, Wiley Blackwell, vol. 58(4), pages 611-634, November.
    • Handle: RePEc:bla:kyklos:v:58:y:2005:i:4:p:611-634
    DOI: 10.1111/j.0023-5962.2005.00305.x
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    1. Spanos,Aris, 1986. "Statistical Foundations of Econometric Modelling," Cambridge Books, Cambridge University Press, number 9780521269124, August.
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    1. Stanley, T.D. & Doucouliagos, Chris & Jarrell, Stephen B., 2008. "Meta-regression analysis as the socio-economics of economics research," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 276-292, February.
    2. Zuzana Richterková & Petr Koráb, 2013. "Impact of insurance sector activity on economic growth - A meta-analysis," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(7), pages 2677-2683.
    3. Peter Kriesler & J W Nevile & G C Harcourt, 2013. "Exchange rates and the macroeconomy in an era of global financial crises, with special reference to Australia," The Economic and Labour Relations Review, , vol. 24(1), pages 51-63, March.
    4. Christophe Tavéra & Jean-Christophe Poutineau & Jean-Sébastien Pentecôte & Isabelle Cadoret & Arthur Charpentier, 2015. "The “mother of all puzzles” at thirty: A meta-analysis," International Economics, CEPII research center, issue 141, pages 80-96.
    5. Germà Bel & Xavier Fageda, 2009. "Factors explaining local privatization: a meta-regression analysis," Public Choice, Springer, vol. 139(1), pages 105-119, April.
    6. Hristos Doucouliagos & Janto Haman & T.D. Stanley, 2012. "Pay for Performance and Corporate Governance Reform," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 670-703, July.
    7. Bui Dieu Thao Nguyen, 2023. "A meta-analysis of the multiplier effects of the money supply on prices," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(4), pages 985-1024, November.
    8. Dany Lang & Mark Setterfield, 2012. "Faith-based Macroeconomics: A Critique of Recent Developments in NAIRU Estimation," Chapters, in: Claude Gnos & Louis-Philippe Rochon & Domenica Tropeano (ed.), Employment, Growth and Development, chapter 5, Edward Elgar Publishing.
    9. Stephan B. Bruns & Christian Gross & David I. Stern, 2014. "Is There Really Granger Causality between Energy Use and Output?," The Energy Journal, , vol. 35(4), pages 101-134, October.
    10. Jerrod M. Penn & Wuyang Hu, 2021. "The Extent of Hypothetical Bias in Willingness to Accept," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 126-141, January.
    11. Matias Mednik & Cesar M. Rodriguez & Inder J. Ruprah, 2012. "Hysteresis in unemployment: Evidence from Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(4), pages 448-466, May.
    12. Doucouliagos, Hristos & Paldam, Martin & Stanley, T.D., 2018. "Skating on thin evidence: Implications for public policy," European Journal of Political Economy, Elsevier, vol. 54(C), pages 16-25.
    13. Afonso, Oscar & Neves, Pedro Cunha & Pinto, Tiago, 2020. "The non-observed economy and economic growth: A meta-analysis," Economic Systems, Elsevier, vol. 44(1).
    14. Stephan B. Bruns, 2013. "Identifying Genuine Effects in Observational Research by Means of Meta-Regressions," Jena Economics Research Papers 2013-040, Friedrich-Schiller-University Jena.
    15. T.D. Stanley, 2013. "Does economics add up? An introduction to meta-regression analysis," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(2), pages 207-220.
    16. Andrea Vaona, 2015. "Anomalous empirical evidence on money long-run super-neutrality and the vertical long-run Phillips curve," Working Papers 17/2015, University of Verona, Department of Economics.
    17. Tomáš Havránek, 2010. "Rose effect and the euro: is the magic gone?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 241-261, June.
    18. repec:aen:journl:ej35-4-05 is not listed on IDEAS
    19. Tomáš Havránek, 2009. "Rose Effect and the Euro: The Magic is Gone," Working Papers IES 2009/20, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2009.
    20. Nino Fonseca & Marcelino Sánchez-Rivero, 2020. "Significance bias in the tourism-led growth literature," Tourism Economics, , vol. 26(1), pages 137-154, February.
    21. Marc Lavoie & Eckhard Hein, 2015. "Going from a low to a high employment equilibrium," IMK Working Paper 144-2015, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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