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Measuring Structural Unemployment: NAWRU Estimates in the Nordic Countries

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  • Holden, Steinar
  • Nymoen, Ragnar

Abstract

The non-accelerating wage rate of unemployment (NAWRU indicator), used by the OECD as a measure of structural unemployment, has risen for the four Nordic countries Denmark, Finland, Norway and Sweden. In this paper we present stable empirical wage equations for the same countries over the period 1964-1994, in sharp contrast to the increased NAWRU estimates. The instability of the NAWRU estimates is an artifact of a misspecified underlying wage equation, and not due to instability in wage setting itself. Copyright 2002 by The editors of the Scandinavian Journal of Economics.

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  • Holden, Steinar & Nymoen, Ragnar, 2002. " Measuring Structural Unemployment: NAWRU Estimates in the Nordic Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(1), pages 87-104.
    • Handle: RePEc:bla:scandj:v:104:y:2002:i:1:p:87-104
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    Citations

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    Cited by:

    1. Gunnar Bårdsen & Ragnar Nymoen, 2003. "Testing Steady-State Implications for the NAIRU," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1070-1075, November.
    2. Bårdsen, Gunnar & Nymoen, Ragnar, 2006. "U.S. natural rate dynamics reconsidered," Memorandum 13/2006, Oslo University, Department of Economics.
    3. Marika Karanassou & Hector Sala & Pablo F. Salvador, 2008. "The (Ir)Relevance Of The Nru For Policy Making: The Case Of Denmark," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(3), pages 369-392, July.
    4. Holmlund, Bertil, 2003. "The Rise and Fall of Swedish Unemployment," Working Paper Series 2003:13, Uppsala University, Department of Economics.
    5. Lindblad, Hans & Sellin, Peter, 2003. "The Equilibrium Rate of Unemployment and the Real Exchange Rate: An Unobserved Components System Approach," Working Paper Series 152, Sveriges Riksbank (Central Bank of Sweden).
    6. Emilian Dobrescu, "undated". "Integration of Macroeconomic Behavioural Relationships and the Input-output Block (Romanian Modelling Experience)," EcoMod2006 272100018, EcoMod.
    7. Niels Framroze Møller, 2013. "Understanding Unemployment Hysteresis: A system-based econometric approach to changing equilibria and slow adjustment," Discussion Papers 13-06, University of Copenhagen. Department of Economics.
    8. Sanna‐Mari Hynninen & Aki Kangasharju & Jaakko Pehkonen, 2009. "Matching Inefficiencies, Regional Disparities, and Unemployment," LABOUR, CEIS, vol. 23(3), pages 481-506, September.
    9. Barkbu, Bergljot Bjornson & Nymoen, Ragnar & Roed, Knut, 2003. "Wage coordination and unemployment dynamics in Norway and Sweden," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(1), pages 37-58, March.
    10. Ragnar Nymoen, 2017. "Between Institutions and Global Forces: Norwegian Wage Formation Since Industrialisation," Econometrics, MDPI, Open Access Journal, vol. 5(1), pages 1-54, January.
    11. Dobrescu, Emilian, 2006. "Macromodel of the Romanian market economy (version 2005)," MPRA Paper 35749, University Library of Munich, Germany.
    12. Forslund, Anders & Gottfries, Nils & Westermark, Andreas, 2005. "Real and nominal wage adjustment in open economies," Working Paper Series 2005:23, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    13. Leitemo, Kai & Lonning, Ingunn, 2006. "Simple Monetary Policymaking without the Output Gap," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(6), pages 1619-1640, September.
    14. L. Lambertini & L. Marattin, 2014. "Adjustment to Equilibrium after a Demand Shock: A Strategic Interaction View," Working Papers wp952, Dipartimento Scienze Economiche, Universita' di Bologna.
    15. Kangasharju, Aki & Hynninen, Sanna-Mari & Pehkonen, Jaakko, 2006. "Regional Matching Frictions and Aggregate Unemployment," Discussion Papers 383, VATT Institute for Economic Research.
    16. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Bardsen, Gunnar & Eitrheim, Oyvind & Jansen, Eilev S. & Nymoen, Ragnar, 2005. "The Econometrics of Macroeconomic Modelling," OUP Catalogue, Oxford University Press, number 9780199246502.
    18. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
    19. Douglas Staiger & James H. Stock & Mark W. Watson, 2001. "Prices, Wages and the U.S. NAIRU in the 1990s," NBER Working Papers 8320, National Bureau of Economic Research, Inc.

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